10.
|
Management
discussion & analysis
|
Introduction
You
should read this discussion together with our consolidated financial statements,
filed with the CVM on February 24th, 2010,
including the notes thereto, and other financial information included elsewhere
in this document. Our consolidated financial statements are prepared in reais and in accordance with
the Brazilian GAAP. Law 11,638/07 was enacted on December 28th, 2007
and Provisional Measure 449/08 on December 3rd, 2008
(later turned into Law 11,941/09), both amending the accounting policies adopted
in Brazil. These amendments were adopted for the first time by Ultrapar in the
fiscal year 2008. The financial statements referring to the fiscal years ending
December 31st, 2007
are shown as previously released, without the changes introduced by the new
legislation, as allowed by CVM. See “Item 10.4.a. Significant changes in
accounting principles” and “Item 10.4.b. Significant effects of the changes in
accounting practices”. Our consolidated financial statements for the years ended
December 31st, 2009,
2008 and 2007 were audited by the independent registered public accounting firm,
KPMG Auditores Independentes.
Except
when otherwise indicated, the amounts presented in this document are expressed
in millions of reais
and are subject to rounding off. Consequently, the total amounts presented in
the tables may differ from the direct sum of the amounts that precede them.
Segment information for our businesses are presented on an unconsolidated basis
and, consequently, intercompany transactions have not been eliminated in segment
information. Additionally, certain smaller subsidiaries were not included in
segment information for our businesses, notably RPR, Serma and Imaven.
Therefore, the sum of the financial information for our businesses presented
hereby do not correspond to the Company’s consolidated financial
information.
References
in this document to “Ultrapar”, “we”, “our”, “us” and “the Company” are to
Ultrapar Participações S.A. and its consolidated subsidiaries (unless the
context otherwise requires). In addition, all references in this document
to:
“am/pm”
are to am/pm Comestíveis Ltda.;
“Braskem”
are to Braskem S.A.;
“BM&FBovespa”
are to the Bolsa de Valores,
Mercadorias e Futuros de São Paulo, the São Paulo Stock
Exchange;
“CBPI”
are to Companhia Brasileira de Petróleo Ipiranga, company incorporated by IPP in
November 2009;
“Chevron”
are to Chevron Latin America Marketing LLC and Chevron Amazonas
LLC;
“DPPI”
are to Distribuidora de Produtos de Petróleo Ipiranga S.A., company incorporated
by CBPI in December 2008;
“EMCA”
are to Empresa Carioca de Produtos Químicos S.A.;
“Grupo
Ipiranga” are to RPR, DPPI, CBPI, Ipiranga Química S.A., Ipiranga Petroquímica
S.A., Companhia Petroquímica do Sul S.A. (former subsidiary of Braskem) and
their subsidiaries prior to their sale to Ultrapar, Petrobras and
Braskem;
“Imaven”
are to Imaven Imóveis Ltda.;
“Ipiranga”
are to Ultrapar’s subsidiaries which operate in the fuel and lubricant
distribution and related activities;
“IPP” are
to Ipiranga Produtos de Petróleo S.A.;
“LPG
International” are to LPG International Inc.;
“Maxfácil”
are to Maxfácil Participações S.A.;
“Oxiteno”
are to Oxiteno S.A. - Indústria e Comércio, our wholly owned subsidiary and its
subsidiaries that produce ethylene oxide and its principal derivatives, fatty
alcohols and other specialty chemicals;
“Oxiteno
Nordeste” are to Oxiteno Nordeste S.A. Indústria e Comércio;
“Oxiteno
Overseas” are to Oxiteno Overseas Co.;
“Petrobras”
are to Petróleo Brasileiro S.A.;
“Puma”
are to Puma Storage do Brasil Ltda;
“Quattor”
are to Quattor Química S.A.;
“RPR” are
to Refinaria de Petróleo Riograndense S.A. (formerly Refinaria de Petróleo
Ipiranga S.A.), a company engaged in oil refining;
“Serma”
are to Association of users of data processing equipment and related services
responsible for IT services for Ultrapar;
“Tequimar”
are to Terminal Químico de Aratu S.A.;
“Texaco”
are to the Texaco-branded fuels marketing business in Brazil, previously
carried-out by Chevron Brasil
Ltda. and by Sociedade
Anônima de Óleo Galena Signal, subsidiaries of Chevron;
“Tropical”
are to Tropical Transportes Ipiranga Ltda.;
“Ultracargo”
are to Ultracargo Operações Logísticas e Participações Ltda., our wholly owned
subsidiary and its subsidiaries that provide road transport, storage, handling
and logistics services for liquid bulk cargo;
“Ultragaz”
are to Ultrapar’s subsidiaries that operate in the distribution of
LPG;
“União
Terminais” are to União Terminais e Armazéns Gerais Ltda.;
“União/Vopak”
are to União/Vopak Armazéns Gerais Ltda., a company in which União Terminais had
a 50% stake;
“Unipar”
are to União das Indústrias Petroquímicas S.A..
10.1.
|
Management
discussion on:
|
|
a.
|
General financial and
equity conditions
|
Company
overview
We are
one of the largest business groups in Brazil, with leading position in the
markets in which we operate. Our four principal segments are:
|
·
|
the
LPG distribution business, conducted by
Ultragaz;
|
|
·
|
the
fuels distribution business, conducted by
Ipiranga;
|
|
·
|
the
chemical and petrochemical business, conducted by Oxiteno;
and
|
|
·
|
logistics
services for special bulk cargo, conducted by
Ultracargo.
|
Ultragaz
distributes LPG to residential, commercial and industrial market segments.
Ipiranga distributes gasoline, ethanol, diesel, NGV (natural gas for vehicles),
fuel oil, kerosene and lubricants through a network of 5.5 thousand service
stations and directly to large customers. Oxiteno produces ethylene oxide and
its principal derivatives, and is also a major producer of specialty chemicals,
particularly surfactants. It manufactures approximately 700 products used in
various industrial sectors such as cosmetics, detergents, crop protection
chemicals, packaging, textiles, paints and varnishes. Ultracargo is the largest
provider of storage for liquid bulk in Brazil.
In April
2007, Ultrapar acquired a controlling stake in certain subsidiaries of the
Ipiranga Group and thereby acquired (i) the fuel and lubricants distribution
businesses in the South and Southeast of Brazil and related activities, (ii)
EMCA – Empresa Carioca de Produtos Químicos S.A., a producer of white
mineral-based oils and special fluids, and (iii) a stake in the refining
operations. The financial statements of Ultrapar consolidate all the businesses
acquired from 2Q07. Under the investment agreement signed with Petrobras and
Braskem, Ultrapar acted as a commission agent for the assets acquired by these
companies, notably the petrochemical business, the fuel and lubricants
distribution business in the North, Northeast and Mid West regions of Brazil,
and 2/3 of the refining operations. With the
acquisition of Ipiranga Group, Ultrapar, which was already the largest LPG
distributor in Brazil, became the second largest fuel distributor in Brazil,
with approximately 14% market share. Ultrapar believes that fuel distribution is
a natural extension of LPG distribution because it has similar profitability
drivers: logistics efficiency, management of a dealer network and leveraging a
renowned brand. In addition, the acquisition was based on the belief that the
fuel distribution business presented attractive growth prospects in light of
increased fuel consumption, principally due to increased national income,
greater availability of credit and measures to curb unfair competitive
practices, which caused the grey market to decline in relation to the formal
market. The financial statements of Ultrapar consolidate all the businesses
acquired from April 1st,
2007.
In June
2008, Ultrapar signed a sale and purchase agreement with Unipar for the
acquisition of 100% of the shares of União Terminais, a company engaged in the
storage and handling of liquid bulk. In October 2008, Ultrapar closed the
acquisition in relation to the port terminals in Santos and Rio de Janeiro. In
November 2008 it closed the acquisition of the 50% stake in União/Vopak, which
owns a port terminal in Paranaguá (in the state of Paraná). The results of the
businesses acquired were consolidated into Ultrapar’s financial statements after
their respective closing dates. Ultrapar’s financial statements in periods prior
to fourth quarter 2008 do not include the results of the businesses
acquired.
In August
2008, Ultrapar announced the signing of the sale and purchase agreement for the
acquisition of Texaco’s fuel distribution business in Brazil. The acquisition
was closed on March 31st, 2009.
The results of the businesses acquired began to be consolidated into Ultrapar’s
financial statements after its closing date. Ultrapar’s financial statements in
periods prior to second quarter 2009 do not include the results of the
businesses acquired.
2009
The year
2009 was marked by the effects of the global financial crisis, more intense
during the first quarter of 2009, period when the Brazilian gross domestic
product decreased by 2.1% compared with 2008. During the following quarters,
measures adopted by the Brazilian government to minimize the impacts of the
crisis started to reflect on the economy, leading to a gradual recovery of the
GDP. Even in the instable economic environment seen particularly in the first
half of 2009, the company reported growth in its results quarter after quarter,
while keeping a sound and prudent management of its cash generation and
indebtedness levels. In 2009, Ultrapar’s net sales and services amounted to R$
36.1 billion, EBITDA amounted to R$ 1,354.4 million and net earnings amounted to
R$ 466.7 million. The company’s net debt to last twelve months EBITDA, which
reached 2.3 times after the payment for the acquisition of Texaco in March
31st, 2009,
was reduced to 1.5 times in December through the achievement of cash generation
established goals. Ultrapar, which had already been assigned the investment
grade rating by Moody’s, was also assigned investment grade by Standard &
Poor’s in October 2009. Ultrapar ended 2009 with total assets of R$ 11.1 billion
and shareholders’ equity of R$ 4.8 billion.
2008
In 2008
Ultrapar concluded a cycle of major investments, continuing its strategy of
expanding its scale and improving the competitiveness of its businesses. In the
fuel distribution segment, Ultrapar continued its growth strategy initiated in
2007 with the acquisition of Ipiranga’s distribution business in the South and
Southeast regions of Brazil, and entered into an agreement in August 2008 to
acquire Texaco's fuel distribution business in Brazil. In the logistic segment,
Ultracargo concluded the acquisition of União Terminais in November, a milestone
in its transformation process, with the objective to consolidate itself as the
largest and most complete provider of integrated logistic solutions for special
bulk cargo in Brazil. In Oxiteno, relevant investments were completed in 2008,
significantly increasing the company's specialty chemical production capacity.
With the acquisitions and investments in organic expansion, we ended 2008 with
net sales of R$ 28.3 billion, EBITDA of R$ 1.1 billion and net earnings of R$
390.3 million. Ultrapar ended 2008 with total assets of R$ 9.7 billion and
shareholders’ equity of R$ 4.7 billion.
2007
The year
2007 represented a milestone for Ultrapar. In one of the largest private-sector
acquisitions in the Brazilian history, Ultrapar acquired the fuel and lubricants
distribution businesses of the Ipiranga Group in the South and Southeast of
Brazil, together with the Ipiranga brand, reaching a new level of size and scale
and creating uncountable benefits and growth opportunities for the company. With
this acquisition Ultrapar strengthened its path for sustainable growth and made
significant progress in expanding its presence in the capital markets. In 2007
Ultrapar reported net sales of R$ 19.9 billion, EBITDA of R$ 779.4 million and
net earnings of R$ 181.9 million. Ultrapar ended 2007 with total assets of R$
9.2 billion and shareholders’ equity of R$ 4.6 billion.
See “Item
10.2.c. Effect of inflation, changes in prices of main feedstocks and products,
foreign exchange and interest rates on operating and financial results” for
trend information.
|
b.
|
Capital structure and
possibility of redemption of
shares:
|
Capital structure
Our paid
up capital as of December 31st, 2009
amounted to R$ 3,696.8 million, composed by 136,095,999 shares, without par
value, of which 49,429,897 are common shares and 86,666,102 are preferred
shares.
2009
Ultrapar
ended the fiscal year 2009 with a gross debt of R$ 4,342.8 million and a gross
cash position of R$ 2,283.2 million, resulting in a net debt of R$ 2,059.6
million, 34% higher than the company’s net debt position at the end of 2008, but
20% lower than the net debt on March 31st, 2009,
the date of the payment for the acquisition of Texaco. On December 31st, 2009,
shareholders’ equity amounted to R$ 4,829.3 million, resulting in a net debt to
shareholders’ equity ratio of 43%.
2008
Ultrapar
ended the financial year 2008 with gross debt of R$ 3,671.9 million and gross
cash position of R$ 2,133.6 million, resulting in a net debt of R$ 1,538.3
million, 7% higher than the company’s net debt position at the end of 2007. On
December 31st, 2008,
shareholders’ equity amounted to R$ 4,650.1 million, resulting in a net debt to
shareholders’ equity ratio of 33%.
2007
Ultrapar
ended 2007 with a gross debt of R$ 3,169.8 million, as a result of the
acquisition of Ipiranga. The company's gross cash position at the end of 2007
was R$ 1,743.7 million, resulting in a net debt position of R$ 1,426.0 million.
On December 31st, 2007,
Ultrapar's total receivables from Petrobras and Braskem amounted to R$ 1.7
billion, corresponding to the stake of the North petrochemical and fuel
distribution assets acquired from the Ipiranga Group on behalf of these
companies. Such amount was received by Ultrapar in 2008. On December 31st, 2007,
shareholders’ equity amounted to R$ 4,600.8 million, resulting in a net debt to
shareholders’ equity ratio of 31%.
Year
ended December 31st,
|
|
2009
|
%
of shareholders’ equity
|
2008
|
%
of shareholders’ equity
|
2007
|
%
of shareholders’ equity
|
Gross
debt
|
4,342.8
|
90%
|
3,671.9
|
79%
|
3,169.8
|
69%
|
Cash
and cash equivalents
|
2,283.2
|
47%
|
2,133.6
|
46%
|
1,743.7
|
38%
|
Net
debt
|
2,059.6
|
43%
|
1,538.3
|
33%
|
1,426.0
|
31%
|
|
i.
|
Hypothesis
for the redemption of shares;
|
There is
no hypothesis for the redemption of shares issued by the Company, in addition to
those legally provided.
|
ii.
|
Calculation
for redemption value
|
Not
applicable.
|
c.
|
Capacity to meet our
financial commitments
|
Our
principal sources of liquidity derive from (i) cash and cash equivalents, (ii)
cash generated from operations and (iii) loans. We believe that these sources
will continue to be sufficient to satisfy our current funding requirements,
which include, but are not limited to, working capital, capital expenditures,
amortization of debt and payment of dividends.
From time
to time, we assess opportunities for acquisitions and investments. We consider
different types of investments, either direct or through our subsidiaries, joint
ventures, or affiliated companies. We finance such investments through cash
generated from our operations, through new loans and financings, through capital
increases or through a combination of these methods.
We
believe we have sufficient working capital for our present requirements. We have
R$ 1,020.3 million in debt maturing from January 2010 through December 2010.
Additionally we have an R$ 820 million capital expenditures budgeted for 2010.
As of December 2009, we had R$ 2,283.2 million in cash, cash equivalents,
short-and long-term investments.
We
anticipate that we will spend approximately R$ 7.2 billion in the next five
years to meet long-term contractual obligations, including the amortization and
payment of interests, as well as the capital expenditures budgeted for
2010.
R$
million
|
|
|
2010-2014 |
|
Financing
|
|
|
3,819.3 |
|
Estimated
interest payments on financing
|
|
|
1,163.6 |
|
Contractual
obligations
|
|
|
1,398.1 |
|
Investment
plan for 2010
|
|
|
819.8 |
|
|
|
|
7,200.8 |
|
See “Item
10.1.f. Indebtedness
level and debt profile”, “Item 10.8.b. Other off-balance sheet arrangements ”
and “Item 10.10.a.i. Quantitative and qualitative description of the investments
in progress and the estimated investments ” for further
information.
We expect
to meet these cash requirements through a combination of cash flows generated
from operating and financing activities, including new debt financing and the
refinancing of some of our indebtedness as it becomes due.
|
d.
|
Sources for financing
working capital and investments in non-current
assets
|
We
generated cash flow from operations of R$ 1,646.4 million, R$ 623.4 million and
R$ 592.5 million for 2009, 2008 and 2007, respectively. Our cash flow from
operations increased by R$ 1,023.0 million in 2009 compared to 2008, mainly
reflecting (i) a decrease in working capital due to the inventory realization
process at Oxiteno and the decrease in the diesel cost at Ipiranga from June
2009 on, (ii) a higher depreciation resulting from the investments made and
(iii) an increase in net earnings, as a result of the 25% increase in EBITDA.
Our cash flow from operations increased by R$ 31 million in 2008 compared to
2007, despite the R$ 208 million increase in net earnings, as a result of an
increase in working capital due to the growth of our businesses. Cash flow of
investing activities used cash of R$ 1,451.7 million, R$ 1,276.4 million and R$
1,668.9 million in the years ended December 31st, 2009, 2008 and 2007,
respectively. In 2009, 2008 and 2007, we invested R$ 479.0 million, R$ 889.4
million and R$ 694.6 million in additions to fixed assets, intangible assets and
deferred charges, net of disposals. In 2009, 2008 and 2007, we invested R$
1,360.6 million, R$ 432.4 million and R$ 889.6 million in equity investments,
net of disposals, mainly due to (i) the acquisition of Texaco in 2009, (ii) the
acquisition of União Terminais in 2008 and (iii) the disbursement related tothe
acquisition of Ipiranga in 2007. Net cash flow from financing activities totaled
R$ 422.9 million, R$ 1,057.9 million and R$ 868.7 million in the
years
ended December 31st, 2009,
2008 and 2007, respectively, reflecting the increase in Ultrapar’s net debt due
to the investments in organic growth and acquisitions. As a consequence, cash
and cash equivalents increased from R$ 1,275.1 as of December 31st, 2008
to R$ 1,887.5 million as of December 31st, 2009,
and from R$ 862.4 million as of December 31st, 2007
to R$ 1,275.1 as of December 31st,
2008.
|
e.
|
Sources for financing
working capital and investments in non-current assets to be used to in
case of deficiencies in
liquidity
|
In 2009,
2008 and 2007, we did not present deficiencies in liquidity. We believe that
Ultrapar has own resources and operational cash generation sufficient to finance
its needs for working capital and investments estimated for 2010.
|
f.
|
Indebtedness level and
debt profile
|
Our gross
debt increased by 18% during the year ended on December 31st, 2009,
from R$ 3,671.9 million as of December 31st, 2008
to R$ 4,342.8 million as of December 31st, 2009.
As of December 31st, 2007,
our gross debt was R$ 3,169.8 million, 14% lower that the gross debt at the
end of 2008. Our short term debt as of December 31st, 2009,
2008 and 2007 was equivalent to 23%, 45% e 57% of our gross debt,
respectively.
The table
below shows our indebtedness for each period:
Loans
|
|
Currency
|
|
|
Interest (p.a.)(1)
|
|
|
Principal
amount of
outstanding
and accrued
interest through December
31st,
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
Foreign
currency-denominated loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
due in 2015
|
|
US$
|
|
|
7.2%
|
|
|
|
431.0 |
|
|
|
577.4 |
|
|
|
436.7 |
|
Advances
on Foreign Exchange Contracts
|
|
US$
|
|
|
2.4%
|
|
|
|
118.6 |
|
|
|
184.2 |
|
|
|
135.2 |
|
Syndicated
loan
|
|
US$
|
|
|
US$
+ LIBOR(2)
+ 1.2%
|
|
|
|
104.1 |
|
|
|
140.0 |
|
|
|
106.4 |
|
BNDES
|
|
US$
|
|
|
6.1%
|
|
|
|
46.9 |
|
|
|
46.5 |
|
|
|
16.0 |
|
FINIMP —
RPR
|
|
US$
|
|
|
3.5%
|
|
|
|
16.6 |
|
|
|
— |
|
|
|
13.2 |
|
Financial
institutions
|
|
MX$(3)
|
|
|
MX$
+ TIIE(3)
+ 1.9%
|
|
|
|
12.2 |
|
|
|
19.8 |
|
|
|
23.1 |
|
Financial
institutions
|
|
US$
|
|
|
US$
+ LIBOR(2)
+ 1.8%
|
|
|
|
9.6 |
|
|
|
49.0 |
|
|
|
31.3 |
|
Financial
institutions
|
|
Bs(4)
|
|
|
20.4%
|
|
|
|
1.0 |
|
|
|
6.0 |
|
|
|
— |
|
FINIMP
— Tequimar
|
|
US$
|
|
|
7.0%
|
|
|
|
0.8 |
|
|
|
4.8 |
|
|
|
— |
|
BNDES
|
|
UMBNDES(5)
|
|
|
8.2%
|
|
|
|
0.5 |
|
|
|
3.5 |
|
|
|
6.0 |
|
Notes
due in 2020
|
|
US$
|
|
|
9.0%
|
|
|
|
— |
|
|
|
140.3 |
|
|
|
106.2 |
|
Notes
due in 2008
|
|
US$
|
|
|
9.9%
|
|
|
|
— |
|
|
|
— |
|
|
|
106.8 |
|
Reais-denominated
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debentures
|
|
R$ |
|
|
108.5%
of CDI
|
|
|
|
1,187.9 |
|
|
|
— |
|
|
|
1,578.1 |
|
BNDES
|
|
R$
|
|
|
TJLP(6)
+ 3.7%
|
|
|
|
1,027.4 |
|
|
|
401.8 |
|
|
|
256.0 |
|
Banco
do Brasil
|
|
R$
|
|
|
91.8%
of CDI
|
|
|
|
532.2 |
|
|
|
516.7 |
|
|
|
21.6 |
|
Caixa
Econômica Federal
|
|
R$
|
|
|
120.0%
of CDI
|
|
|
|
495.3 |
|
|
|
— |
|
|
|
— |
|
Banco
do Nordeste do Brasil
|
|
R$
|
|
|
8.5%(7)
|
|
|
|
112.6 |
|
|
|
103.5 |
|
|
|
103.5 |
|
Loan
- MaxFácil
|
|
R$
|
|
|
100.0%
of CDI
|
|
|
|
110.8 |
|
|
|
108.4 |
|
|
|
102.2 |
|
FINEP
|
|
R$
|
|
|
TJLP(6)+
0.9%
|
|
|
|
68.1 |
|
|
|
60.4 |
|
|
|
61.6 |
|
Working
capital loan — União Vopak/RPR
|
|
R$
|
|
|
125.5%
of CDI
|
|
|
|
18.5 |
|
|
|
37.2 |
|
|
|
— |
|
FINAME
|
|
R$
|
|
|
TJLP(6)
+ 3.3%
|
|
|
|
16.7 |
|
|
|
39.1 |
|
|
|
63.1 |
|
Financial
leasing floating rate
|
|
R$
|
|
|
CDI
+ 0.5%
|
|
|
|
13.2 |
|
|
|
24.4 |
|
|
|
— |
|
Loans
|
|
Currency
|
|
|
Interest (p.a.)(1)
|
|
|
Principal
amount of
outstanding
and accrued
interest through December
31st,
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
BNDES
|
|
R$
|
|
|
5.1%
|
|
|
|
12.3 |
|
|
|
— |
|
|
|
2.5 |
|
Financial
institutions
|
|
R$
|
|
|
10.1%
|
|
|
|
2.2 |
|
|
|
— |
|
|
|
— |
|
Financial
leasing - fixed rate
|
|
R$
|
|
|
13.6%
|
|
|
|
2.1 |
|
|
|
1.0 |
|
|
|
— |
|
Others
|
|
R$
|
|
|
CDI
+ 0.4%
|
|
|
|
2.2 |
|
|
|
4.1 |
|
|
|
0.3 |
|
Promissory
notes
|
|
R$
|
|
|
CDI
+ 3.6%
|
|
|
|
— |
|
|
|
1,203.8 |
|
|
|
— |
|
Total
|
|
|
|
|
|
|
|
|
4,342.8 |
|
|
|
3,671.9 |
|
|
|
3,169.8 |
|
|
(1)
|
Interest
rate only as of 2009.
|
|
(2)
|
LIBOR
– London Interbank Offered
Rate
|
|
(3)
|
MX$
- Mexican peso; TIIE - Mexican interbank balance interest
rate.
|
|
(4)
|
Bs –
Venezuelan Bolívar Forte.
|
|
(5)
|
UMBNDES
- monetary unit of BNDES (Banco Nacional de Desenvolvimento Econômico e
Social) is a “basket of currencies” representing the composition of
foreign currency debt obligations of BNDES. As of December 2009, 95% of
this composition reflected the U.S.
dollar.
|
|
(6)
|
TJLP
- set by the National Monetary Council, TJLP is the basic financing cost
of BNDES. On December 31st, 2009, TJLP was fixed at 6%
p.a..
|
|
(7)
|
Contract
linked to the rate of FNE (Northeast Constitutional Financing Fund) fund
whose purpose is to foster the development of the industrial sector,
managed by Banco do Nordeste. On December 31st, 2009, the FNE interest
rate was 10% p.a. Over the interest, there is a compliance bonus of
15%.
|
The table
below shows the maturity profile of our indebtedness as of December 31st,
2009:
|
|
|
|
|
|
|
|
2010
|
|
|
1,020.3 |
|
2011
|
|
|
919.2 |
|
2012
|
|
|
1,702.0 |
|
2013
|
|
|
111.2 |
|
2014
|
|
|
66.6 |
|
2015
thereafter
|
|
|
523.5 |
|
Total
|
|
|
4,342.8 |
|
See “Item
10.1.c. Capacity to meet our financial commitments”.
|
i.
|
Relevant
loan and financing contracts
|
Notes due in
2015
In
December 2005, our subsidiary LPG International issued notes in the amount of
US$ 250 million, maturing in December 2015, with annual interest rate of 7.25%
paid semiannually, with the first payment made in June 2006. The issuance price
was 98.75% of the notes’ face value, representing a total yield for investors of
7.429% per year upon issuance. The notes were guaranteed by Ultrapar and Oxiteno
S.A..
Syndicated loan and notes
due in 2020
In June
1997, the subsidiary Companhia Ultragaz S.A. issued US$ 60 million in notes (the
“Original Notes”) maturing in 2005. In June 2005, maturity was extended to June
2020, with put/call options in June 2008 that were neither exercised by the
subsidiary nor by the financial institutions.
In June
2005, Oxiteno’s subsidiary Oxiteno Overseas acquired all outstanding Original
Notes issued by Companhia Ultragaz S.A., with funds from a syndicated loan in
the amount of US$ 60 million with maturity in June 2008 and interest rate of
5.05% per year. In June 2008, the syndicated loan was renewed under the same
conditions, at an interest rate of LIBOR plus 1.25% per annum. The syndicated
loan was guaranteed by Ultrapar and the subsidiary Oxiteno S.A..
In April
2006, Oxiteno Overseas sold the Original Notes issued by Ultragaz to a financial
institution. Simultaneously, the subsidiary acquired from that financial
institution notes linked to the Original Notes (the
“Linked
Notes”), thus obtaining an additional return on this investment. On December
23rd, 2009,
the subsidiary Oxiteno Overseas sold the Linked Notes to the financial
institution and repurchased the Original Notes.
Notes due in
2008
On
August 1st, 2003,
CBPI issued US$ 135 million in notes in the international market with annual
interest rate of US$ + 9.875% per annum, maturing in July, 2008. Part of these
notes were redeemed in 2005 and 2006, in the amounts of US$ 1.3 million (R$ 3.1
million) and US$ 79.6 million (R$164.9 million), respectively. In July 2008,
these notes matured and were consequently settled.
Debentures and Promissory
Notes denominated in Reais
On April
18th, 2006,
CBPI registered with the CVM a public offering of 35,000 subordinated
debentures, single series, non-convertible into shares and unsecured, in the
total amount of R$ 350 million, maturing on April 1st, 2011
at a rate of 103.8% of CDI. In the first quarter of 2008 CBPI redeemed these
debentures.
In June
2009, Ultrapar made its third issuance of debentures, in a single series of
1,200 simple, non-convertible into shares and unsecured with the following
characteristics:
Face value
unit:
|
R$
1,000,000.00
|
Final
maturity:
|
May 19th, 2012
|
Payment of the face
value:
|
Lump sum at final
maturity
|
Interest:
|
100% CDI + 3.0%
p.a.
|
Payment of
interest:
|
Annually
|
Reprice:
|
Not
applicable
|
The
proceeds obtained with this issuance were used for the prepayment, in June 2009,
of 120 Promissory Notes in the total amount of R$ 1,200,000,000.00 issued by the
company in December 2008.
In
December 2009, we concluded the review of certain terms and conditions of our
third issuance of debentures. Thus, the interest of the debentures was reduced
to 108.5% of CDI and its maturity date was extended to December 4th, 2012.
The debentures have annual interest payments and amortization in one single
tranche at the maturity date, with the following characteristics:
Face value
unit:
|
R$
1,000,000.00
|
Final
maturity:
|
December 4th, 2012
|
Payment of the face
value:
|
Lump sum at final
maturity
|
Interest:
|
108.5% of
CDI
|
Payment of
interest:
|
Annually
|
Reprice:
|
Not
applicable
|
Financing contracts with the
BNDES
In August
2006, our subsidiaries signed a revolving line of credit agreement with BNDES
(Brazilian National Development Bank) in the total amount of R$ 728 million to
finance investments over the next 5 years, starting in 2006. In December 2008,
an additional credit limit was hired with BNDES, including new beneficiaries
(IPP and its subsidiaries), and the credit limit was extended to R$ 1,622
million. On December 31st, 2009,
the amount being used by the subsidiaries was R$ 537 million.
|
ii.
|
Other
long term relations with financial
institutions
|
In
addition to the relationships mentioned in items 10.1.f.i.Relevant loan and
financing contracts and 10.1.g.Limits of use of contracted loans and financing,
Ultrapar maintains long term relationships with financial institutions (i) in
connection with the ordinary course of the business, such as the payroll of its
employees, credit and collection, payments and currency and interest rate
hedging instruments and (ii) through a joint venture (50%/50%) between Ipiranga
and ItaúUnibanco for the provision of financial services and management of the
Ipiranga-branded credit cards, due in 2016.
|
iii.
|
Subordination
of debt
|
Our
secured debt as of December 31st, 2009
amounted to R$ 644.8 million. Except for the secured debt, there is no
subordination among our existing debt.
|
iv.
|
Any
restrictions imposed on the issuer, especially related to indebtedness
limits and the hiring of new debt, to dividend distribution, to the sale
of assets, to the issuing of new securities and to change of
control
|
The restrictions imposed on Ultrapar and
its subsidiaries are those usual for transactions of this nature
and have not limited their ability to conduct their business to
date.
As a result of the issuance of notes due
in 2015, certain obligations must be maintained by Ultrapar:
|
·
|
Limit
on transactions with shareholders that hold 5% or more of any class of
capital of the company, except upon fair and reasonable terms no less
favorable to the company than what could be obtained in a comparable
arm’s-length transaction with a
third-party;
|
|
·
|
board
approval requirement for transactions with related parties totaling more
than US$ 15 million (except transactions with or between
subsidiaries);
|
|
·
|
restriction
on the sale of all or substantially all assets of the company and its
subsidiaries;
|
|
·
|
restriction
on encumbrances on assets in excess of US$ 150 million or 15% of the value
of consolidated tangible assets.
|
As a result of the issuance of the
syndicated loan, some obligations additional to the ones mentioned
above must be maintained by
Ultrapar:
|
·
|
maintain
a ratio of consolidated net debt to consolidated EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) of no more than 3.5;
and
|
|
·
|
maintain
a ratio of consolidated EBITDA to consolidated net financial expenses of
at least 1.5.
|
As a result of BNDES financing
contracts, some obligations must be maintained by Ultrapar, notably those set out at the
applicable rules to BNDES contracts, available at the website
www.bndes.gov.br.
|
g.
|
Limits of use of
contracted loans and
financings
|
The BNDES
credit lines described under “Item 10.1.f.i. Relevant loan and financing
contracts – BNDES” must be used exclusively to partially finance the company’s
investments projects. The proceeds are available upon approval of each project
and according to the project’s disbursement schedule.
|
h.
|
Significant changes in
each item of the financial
statements
|
|
|
Year ended December
31st
|
|
|
Percent
change
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2009 vs.
2008
|
|
|
2008 vs.
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
financial investments
|
|
|
2,276.0 |
|
|
|
2,126.4 |
|
|
|
1,622.9 |
|
|
|
7 |
% |
|
|
31 |
% |
Trade accounts
receivable
|
|
|
1,612.5 |
|
|
|
1,429.3 |
|
|
|
1,344.4 |
|
|
|
13 |
% |
|
|
6 |
% |
Inventories
|
|
|
942.2 |
|
|
|
1,033.8 |
|
|
|
631.1 |
|
|
|
-9 |
% |
|
|
64 |
% |
Deferred income
tax and social contribution
|
|
|
168.8 |
|
|
|
111.8 |
|
|
|
109.0 |
|
|
|
51 |
% |
|
|
3 |
% |
Other
receivables
|
|
|
378.3 |
|
|
|
434.5 |
|
|
|
1,986.6 |
|
|
|
-13 |
% |
|
|
-78 |
% |
Total
Current Assets
|
|
|
5,377.8 |
|
|
|
5,135.8 |
|
|
|
5,694.0 |
|
|
|
5 |
% |
|
|
-10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
investments
|
|
|
7.2 |
|
|
|
7.2 |
|
|
|
120.8 |
|
|
|
0 |
% |
|
|
-94 |
% |
Deferred income
tax and social contribution
|
|
|
472.7 |
|
|
|
408.7 |
|
|
|
119.6 |
|
|
|
16 |
% |
|
|
242 |
% |
Trade accounts
receivable
|
|
|
338.2 |
|
|
|
210.1 |
|
|
|
176.9 |
|
|
|
61 |
% |
|
|
19 |
% |
Other
receivables
|
|
|
205.5 |
|
|
|
129.7 |
|
|
|
148.5 |
|
|
|
58 |
% |
|
|
-13 |
% |
Total
Long Term Assets
|
|
|
1,023.6 |
|
|
|
755.7 |
|
|
|
565.8 |
|
|
|
35 |
% |
|
|
34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
23.3 |
|
|
|
34.0 |
|
|
|
51.5 |
|
|
|
-32 |
% |
|
|
-34 |
% |
Property, plant
and equipment and intangibles
|
|
|
4,655.8 |
|
|
|
3,726.1 |
|
|
|
2,877.5 |
|
|
|
25 |
% |
|
|
29 |
% |
Deferred
charges
|
|
|
9.8 |
|
|
|
15.6 |
|
|
|
27.6 |
|
|
|
-37 |
% |
|
|
-43 |
% |
Total
Fixed Assets
|
|
|
4,688.9 |
|
|
|
3,775.7 |
|
|
|
2,956.6 |
|
|
|
24 |
% |
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-current Assets
|
|
|
5,712.5 |
|
|
|
4,531.4 |
|
|
|
3,522.4 |
|
|
|
26 |
% |
|
|
29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
11,090.3 |
|
|
|
9,667.2 |
|
|
|
9,216.4 |
|
|
|
15 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
financing
|
|
|
1,018.9 |
|
|
|
1,658.1 |
|
|
|
588.9 |
|
|
|
-39 |
% |
|
|
182 |
% |
Debentures
|
|
|
1.4 |
|
|
|
- |
|
|
|
1,228.1 |
|
|
|
- |
|
|
|
-100 |
% |
Suppliers
|
|
|
891.9 |
|
|
|
614.2 |
|
|
|
582.7 |
|
|
|
45 |
% |
|
|
5 |
% |
Payroll and
related charges
|
|
|
176.5 |
|
|
|
164.6 |
|
|
|
123.2 |
|
|
|
7 |
% |
|
|
34 |
% |
Taxes
|
|
|
125.5 |
|
|
|
89.0 |
|
|
|
93.9 |
|
|
|
41 |
% |
|
|
-5 |
% |
Other accounts
payable
|
|
|
273.8 |
|
|
|
221.8 |
|
|
|
390.6 |
|
|
|
23 |
% |
|
|
-43 |
% |
Total
Current Liabilities
|
|
|
2,488.0 |
|
|
|
2,747.7 |
|
|
|
3,007.3 |
|
|
|
-9 |
% |
|
|
-9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
financing
|
|
|
2,136.0 |
|
|
|
2,013.8 |
|
|
|
1,002.8 |
|
|
|
6 |
% |
|
|
101 |
% |
Debentures
|
|
|
1,186.5 |
|
|
|
- |
|
|
|
350.0 |
|
|
|
- |
|
|
|
-100 |
% |
Deferred income
tax and social contribution
|
|
|
12.6 |
|
|
|
18.2 |
|
|
|
1.8 |
|
|
|
-31 |
% |
|
|
893 |
% |
Other long term
liabilities
|
|
|
402.9 |
|
|
|
199.1 |
|
|
|
218.8 |
|
|
|
102 |
% |
|
|
-9 |
% |
Total
Long Term Liabilities
|
|
|
3,738.0 |
|
|
|
2,231.2 |
|
|
|
1,573.5 |
|
|
|
68 |
% |
|
|
42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
6,226.0 |
|
|
|
4,978.9 |
|
|
|
4,580.8 |
|
|
|
25 |
% |
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
3,696.8 |
|
|
|
3,696.8 |
|
|
|
3,696.8 |
|
|
|
0 |
% |
|
|
0 |
% |
Capital
reserve
|
|
|
1.3 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
49 |
% |
|
|
0 |
% |
Revaluation
reserves
|
|
|
8.2 |
|
|
|
10.3 |
|
|
|
11.6 |
|
|
|
-21 |
% |
|
|
-12 |
% |
Profit
reserves
|
|
|
1,132.4 |
|
|
|
940.1 |
|
|
|
891.5 |
|
|
|
20 |
% |
|
|
5 |
% |
Valuation and
cumulative translation adjustments
|
|
|
(9.4 |
) |
|
|
2.1 |
|
|
|
- |
|
|
|
-555 |
% |
|
|
- |
|
Total Stockholders'
Equity
|
|
|
4,829.3 |
|
|
|
4,650.1 |
|
|
|
4,600.8 |
|
|
|
4 |
% |
|
|
1 |
% |
Minority
Interests
|
|
|
35.0 |
|
|
|
38.2 |
|
|
|
34.8 |
|
|
|
-8 |
% |
|
|
10 |
% |
TOTAL STOCKHOLDERS' EQUITY &
MINORITY INTEREST
|
|
|
4,864.3 |
|
|
|
4,688.3 |
|
|
|
4,635.6 |
|
|
|
4 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
11,090.3 |
|
|
|
9,667.2 |
|
|
|
9,216.4 |
|
|
|
15 |
% |
|
|
5 |
% |
Main
changes in the consolidated balance sheet accounts on December 31st, 2009
compared with December 31st,
2008
Assets
Current
assets
Current
assets amounted to R$ 5,377.8 million in 2009, a R$ 242.0 million increase
compared with current assets of R$ 5,135.8 million in 2008, as a result of the
increases in cash and financial investments and trade accounts receivable,
partially offset by a reduction in inventories.
Cash and financial
investments
Cash and
financial investments amounted to R$ 2,276.0 million on December 31st, 2009,
a R$ 149.6 million increase compared with December 31st, 2008,
as a result of the cash flow generated from our operations in the period and the
hiring of new debt, partially offset by the payment related to the acquisition
of Texaco.
Trade accounts
receivable
Trade
accounts receivable amounted to R$ 1,612.5 million on December 31st, 2009,
a R$ 183.2 million increase compared with December 31st, 2008,
as a result of a R$ 210.1 million increase in Ipiranga, as a consequence of the
consolidation of Texaco from 2Q09 on, partially offset by a reduction in trade
accounts receivable in the other businesses.
Inventories
Inventories
amounted to R$ 942.2 million on December 31st, 2009,
a R$ 91.6 million decrease compared with December 31st, 2008,
as a result of a R$ 225.5 million reduction in Oxiteno’s inventories in 2009,
which on December 31st, 2008
were R$ 277.6 million higher than that of December 31st, 2007,
due to a reduced demand as a consequence of the worsening of the global
financial crisis in 4Q08. The increase in Oxiteno’s inventories was partially
offset by an R$ 132.5 million increase in Ipiranga, as a consequence of the
consolidation of Texaco from 2Q09 on.
Non-current
assets
Non-current
assets amounted to R$ 5,712.5 million on December 31st, 2009,
an R$ 1,181.1 million increase compared with December 31st, 2008.
Long term assets amounted to R$ 1,023.6 million on December 31st, 2009,
a R$ 267.9 million increase compared with December 31st, 2008,
mainly as result of an increase in trade accounts receivable (long term). Fixed
assets amounted to R$ 4,668.9 million, a R$ 913.2 million increase compared with
2008, as a result of an increase in property, plant and equipment and
intangibles.
Trade accounts receivable
(long term)
Ultrapar’s
trade accounts receivable (long term) amounted to R$ 338.2 million on December
31st, 2009,
an R$ 128.1
million increase compared with December 31st, 2008,
as result of the increased level of financing and bonuses to Ipiranga’s
resellers and clients.
Property, plant and
equipment and intangibles
Property,
plant and equipment and intangibles amounted to R$ 4,655,8 million on December
31st, 2009,
a R$ 929.7
million increase compared with December 31st, 2008,
as a consequence of the consolidation of Texaco’s assets from 2Q09 on and the
organic investments made in 2009.
Liabilities
Current
liabilities
Current
liabilities amounted to R$ 2,448.0 million on December 31st, 2009,
a R$ 259.7 million decrease compared with December 31st, 2008,
mainly as a result of a reduction in loans and financing, partially offset by an
increase in suppliers.
Loans and
financing
Loans and
financing amounted to R$ 1,018.9 million on December 31st, 2009,
a R$ 639.2 million decrease in 2009, as result of the replacement of R$ 1,200.0
million promissory notes by long term debentures in the same
amount,
partially offset by increased funding from BNDES (see “Long term liabilities –
Debentures” and “Item 10.1.f. Indebtedness level and debt
profile”).
Suppliers
Suppliers
amounted to R$ 891.9 million on December 31st, 2009,
a R$ 277.7 million increase compared with December 31st, 2008,
mainly as result of a R$ 275.9 million increase in Ipiranga as a consequence of
the consolidation of Texaco from 2Q09 on.
Non-current
liabilities
Non-current
liabilities amounted to R$ 3,738.0 million on December 31st, 2009,
an R$ 1,506.9 million increase compared with December 31st, 2008,
mainly as result of the issuance of debentures.
Debentures
In June
2009, Ultrapar carried out its third issuance of debentures in the amount of R$
1,200.0 million with maturity in 2012. The proceeds of the issuance were used
for the anticipated payment, in June 2009, of the promissory notes of the same
amount issued in December 2008 (see “Item 10.1.f. Indebtedness level and debt
profile”).
Stockholders'
Equity
Ultrapar’s
stockholders' equity amounted to R$ 4,829.3 million on December 31st, 2009, a R$
179.2 million increase compared with December 31st, 2008,
as result of an increase in profit reserves, due to higher net earnings in
2009.
Main
changes in the consolidated balance sheet accounts on December 31st, 2008
compared with December 31st,
2007
Assets
Current
assets
Current
assets amounted to R$ 5,135.8 million on December 31st 2008, a
R$ 558.2 million decrease compared with December 31st, 2007,
as a result of the reduction in other assets, notably other trade accounts
receivable, partially offset by an increase in cash and financial investments
and in inventories.
Cash and financial
investments
Cash and
financial investments amounted to R$ 2,126.4 million on December 31st, 2008,
a R$ 503.5 million increase compared with December 31st, 2007,
as a result of resources received from Petrobras and Braskem related to the
Ipiranga Group acquisition, partially offset by higher investments and the
disbursement to União Terminais’ acquisition.
Inventories
Inventories
amounted to R$ 1,033.8 million on December 31st, 2008,
a R$ 402.7 million increase compared with December 31st, 2007,
of which R$ 128.7 million resulted from an increase in inventories at Ipiranga
and R$ 277.6 million at Oxiteno, due to a reduced demand derived from the
worsening of the financial crisis in the 4Q08 and the increase in the diesel
cost in 2008.
Other
receivables
Other
receivables of Ultrapar amounted to R$ 434.5 million on December 31st, 2008,
a R$ 1,552.1 million decrease compared with December 31st, 2007,
due to the R$ 1,668.8 reduction in other receivables as a result of resources
received from Petrobras and Braskem in connection with the Ipiranga Group
acquisition.
Non-current
assets
Non-current
assets amounted to R$ 4,531.4 million on December 31st, 2008,
a R$ 1,009.0 million increase compared with December 31st, 2007.
Long term assets amounted to R$ 755.7 million on December 31st, 2008,
a R$ 189.9 million increase compared with December 31st, 2007,
as result of the increase in deferred income tax
and
social contribution, partially offset by a reduction in the financial
investments (long term). Fixed assets amounted to R$ 3,775.7 million, an R$
819.1 million increase compared with 2007.
Deferred income tax and
social contribution
Deferred
income tax and social contribution (long term) amounted to R$ 408.7 million on
December 31st, 2008,
substantially built during 2008, as a result of the recognition of tax credit
related mainly to the goodwill on investments made.
Financial
investments
Financial
investments (long term) presented an R$ 113.6 million decrease compared with
December 31st, 2007,
mainly as a result of the transference of these assets to short term financial
investments.
Property, plant and
equipment and intangible
Property,
plant and equipment and intangible amounted to R$ 3,726.1 million on December
31st, 2008,
an R$ 848.6
million increase compared with December 31st, 2007,
mainly as a result of União Terminais’ asset consolidation.
Liabilities
Current
liabilities
The
current liabilities on December 31st, 2008
was of R$ 2,747.7 million, a R$ 259.6 million decrease compared with December
31st, 2007,
as a result of the variations in loans and financing and debentures
accounts.
Loans and
financing
Loans and
financing amounted to R$ 1,658.1 million on December 31st, 2008,
a R$ 1,069.2 million increase compared with December 31st, 2007,
as result of the issuance of R$1,200.0 million promissory notes in March
2008.
Debentures
In April
2007, Ultrapar carried out its second issuance of debentures in the amount of R$
889.0 million, to finance part of Ipiranga acquisition. The debentures were
fully withdrawn in first quarter 2008.
Long term
liabilities
The long
term liabilities amounted to R$ 2,231.2 million on December 31st, 2008,
a R$ 657.7 million increase compared with December 31st, 2007,
as result of an increase in loans and financing account, partially offset by the
decrease in debentures.
Loans and
financing
Loans and
financing amounted to R$ 2,013.8 million on December 31st, 2008,
an R$ 1,011.0 million increase compared with December 31st, 2007,
as result of increased debt issuance.
Debentures
The R$
350.0 million debentures issued by CBPI in 2005, assumed at the Ipiranga
acquisition, were early withdrawn in first quarter 2008.
Stockholders'
Equity
Ultrapar
stockholders' equity amounted to R$ 4,650.1 million on December 31st, 2008,
a R$ 49.3 million increase compared with December 31st, 2007,
as result of an increase in profit reserves, due to a bigger profit in
2008.
Significant
changes in the consolidated income statement
Main
changes in the consolidated income statement for the year ended December 31st, 2009
compared with the year ended December 31st,
2008
|
|
Year
ending December 31st
|
|
|
%
of net sales and services
|
|
|
Year
ending December 31st
|
|
|
%
of net sales and services
|
|
|
Percent
change
2009-2008
|
|
|
|
2009
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales and
services
|
|
|
36,115.9 |
|
|
|
100 |
% |
|
|
28,268.0 |
|
|
|
100 |
% |
|
|
28 |
% |
Cost of sales and
services
|
|
|
(33,412.0 |
) |
|
|
93 |
% |
|
|
(26,152.3 |
) |
|
|
93 |
% |
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
2,703.9 |
|
|
|
7 |
% |
|
|
2,115.7 |
|
|
|
7 |
% |
|
|
28 |
% |
Selling,
general and administrative expenses
|
|
|
(1,808.2 |
) |
|
|
5 |
% |
|
|
(1,424.4 |
) |
|
|
5 |
% |
|
|
27 |
% |
Other operating income
(expenses)
|
|
|
19.3 |
|
|
|
0 |
% |
|
|
22.1 |
|
|
|
0 |
% |
|
|
-13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
915.1 |
|
|
|
3 |
% |
|
|
713.4 |
|
|
|
3 |
% |
|
|
28 |
% |
Financial
results
|
|
|
(278.2 |
) |
|
|
1 |
% |
|
|
(168.8 |
) |
|
|
1 |
% |
|
|
65 |
% |
Other
income
|
|
|
20.3 |
|
|
|
0 |
% |
|
|
11.2 |
|
|
|
0 |
% |
|
|
81 |
% |
Income and social contribution
tax
|
|
|
(187.1 |
) |
|
|
1 |
% |
|
|
(151.6 |
) |
|
|
1 |
% |
|
|
23 |
% |
Minority interest/equity in
earnings of affiliates
|
|
|
(3.4 |
) |
|
|
0 |
% |
|
|
(4.5 |
) |
|
|
0 |
% |
|
|
-25 |
% |
Employees statutory
interest
|
|
|
- |
|
|
|
- |
|
|
|
(9.5 |
) |
|
|
0 |
% |
|
|
- |
|
Net
income
|
|
|
466.7 |
|
|
|
1 |
% |
|
|
390.3 |
|
|
|
1 |
% |
|
|
20 |
% |
EBITDA
|
|
|
1,354.4 |
|
|
|
4 |
% |
|
|
1,079.4 |
|
|
|
4 |
% |
|
|
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
439.3 |
|
|
|
1 |
% |
|
|
375.5 |
|
|
|
1 |
% |
|
|
17 |
% |
Overview
on sales volume
|
|
2009
|
|
|
2008
|
|
|
Percent change
2009-2008
|
|
Ultragaz (000
ton)
|
|
|
1,589 |
|
|
|
1,601 |
|
|
|
-1 |
% |
Ipiranga (000 m3)
|
|
|
17,214 |
|
|
|
12,075 |
|
|
|
43 |
% |
Oxiteno (000
ton)
|
|
|
634 |
|
|
|
567 |
|
|
|
12 |
% |
Ultracargo (000 m3)
|
|
|
461 |
|
|
|
335 |
|
|
|
37 |
% |
In 2009,
the Brazilian LPG market decreased by 1.2% from 2008. In the same period,
Ultragaz’s sales volume reached 1,589 thousand tons, a 0.7% decrease, with a
0.7% increase in the bottled segment and a 4.0% decrease in the bulk segment.
Excluding the effect of a temporary consumption of 15 thousand tons in 2008 by a
large client in the bulk segment, the total volume would have remained stable,
and sales volume in the bulk segment would have decreased by 1% compared with
2008. The growth in the bottled segment is a result of the resilient demand in
this segment, given its essential good nature, and of commercial initiatives
implemented by the company, including new markets. At Ipiranga, sales volume
grew by 43%, mainly as a consequence of the consolidation of Texaco’s volume
from 2Q09 on and the expansion of the light vehicle fleet, which boosted the
combined volume of gasoline, ethanol and NGV. The diesel volume increased by 32%
as a result of the aggregation of Texaco’s volume from 2Q09 onwards, partly
offset by a reduction in consumption associated with the economic performance.
At Oxiteno, sales volume reached 634 thousand tons in 2009, up 12% over 2008,
mainly due to completed expansions in the production capacity, highlighting the
8% growth in the domestic market, primarily on the back of imports replacement.
At Ultracargo, effective storage showed an increase of 37%, as result of the
consolidation of União Terminais from 4Q08 onwards, the expansions of the Aratu
terminal and a higher volume of operations at the Suape terminal.
Net
sales and services
|
|
2009
|
|
|
2008
|
|
|
Percent change
2009-2008
|
|
Ultragaz
|
|
|
3,441.2 |
|
|
|
3,339.3 |
|
|
|
3 |
% |
Ipiranga
|
|
|
30,498.8 |
|
|
|
22,676.4 |
|
|
|
34 |
% |
Oxiteno
|
|
|
1,921.1 |
|
|
|
1,926.1 |
|
|
|
0 |
% |
Ultracargo
|
|
|
337.0 |
|
|
|
283.4 |
|
|
|
19 |
% |
Ultrapar’s
net sales and services amounted to R$ 36,115.9 million in 2009, a 28% increase
over 2008, mainly as a consequence of the consolidation of Texaco from 2Q09
onwards. Ultragaz’s net sales and services amounted to R$ 3,441.2 million, 3%
higher than that of 2008, despite the 0.7% decrease in sales volume, due to
commercial
initiatives
and operational efficiency programs implemented. Ipiranga’s net sales and
services totaled R$ 30,498.8 million in 2009, a 34% growth over 2008, as a
consequence of the 43% increase in sales volume, partly offset by the reduction
in the diesel ex-refinery cost in June 2009. Oxiteno reported net sales and
services of R$ 1,921.1 million, practically stable compared with 2008, despite
the 12% increase in sales volume and the 9% weaker Real, as a result of an 18%
decrease in average dollar prices, particularly the 46% decrease in
international glycol prices. Ultracargo’s net sales and services amounted to R$
337.0 million, 19% higher than that in 2008, mainly on the back of the
consolidation of União Terminais from 4Q08 onwards, increased average storage,
and contractual tariff adjustments.
Cost
of products and services
|
|
2009
|
|
|
2008
|
|
|
Percent change
2009-2008
|
|
Ultragaz
|
|
|
2,895.7 |
|
|
|
2,898.4 |
|
|
|
0 |
% |
Ipiranga
|
|
|
28,828.0 |
|
|
|
21,492.2 |
|
|
|
34 |
% |
Oxiteno
|
|
|
1,611.2 |
|
|
|
1,526.8 |
|
|
|
6 |
% |
Ultracargo
|
|
|
197.0 |
|
|
|
187.4 |
|
|
|
5 |
% |
Ultrapar's
cost of products and services amounted to R$ 33,412.0 million in 2009, a 28%
increase over 2008, mainly as a consequence of the consolidation of Texaco from
2Q09 onwards. Ultragaz’s cost of products sold amounted to R$ 2,895.7 million,
practically stable compared with 2008 and in line with the variation in sales
volume. Ipiranga’s cost of products sold totaled R$ 28,828.0 million, mainly as
a consequence of a 43% increase in sales volume, partly offset by the decrease
in the diesel ex-refinery cost in June 2009. The cost of products sold at
Oxiteno totaled R$ 1,611.2 million, an increase of 6% over 2008, due to the
growth in sales volume, a 9% weaker Real and a higher depreciation resulting
from the expanded operations in 4Q08, partly offset by a 17% reduction in the
variable cost per ton in dollar. Nevertheless, the reduction in the variable
cost per ton in dollar price reported in the 2009 financial statements was
significantly lower than the reduction in raw materials international prices,
due to the process of realization of Oxiteno’s inventories with historical costs
higher than replacement costs, mainly in the first half of the year.
Ultracargo's cost of services provided amounted to R$ 197 million, up 5% from
2008, as a result of the consolidation of União Terminais’ cost of services from
4Q08 onwards and an increase in the volume of products handled at the terminals,
partly offset by the realization of operational synergies resulting from the
consolidation of União Terminais and a reduced presence in the packed cargo
transportation segment.
Gross
profit
Ultrapar’s
gross profit amounted to R$ 2,703.9 million in 2009, a 28% increase over 2008,
mainly due to the consolidation of Texaco from second quarter 2009 on.
Ultragaz’s gross profit totaled R$ 545.5 million, up 24% from 2008. Ipiranga’s
gross profit amounted to R$ 1,670.7 million, 41% higher than that in 2008.
Oxiteno’s gross profit totaled R$ 309.9 million, 22% lower than that of 2008.
Ultracargo’s gross profit totaled R$ 139.9 million, 46% higher than that in
2008.
Sales,
general and administrative expenses
|
|
2009
|
|
|
2008
|
|
|
Percent change
2009-2008
|
|
Ultragaz
|
|
|
381.4 |
|
|
|
348.3 |
|
|
|
9 |
% |
Ipiranga
|
|
|
1,068.2 |
|
|
|
691.4 |
|
|
|
54 |
% |
Oxiteno
|
|
|
267.6 |
|
|
|
246.0 |
|
|
|
9 |
% |
Ultracargo
|
|
|
90.0 |
|
|
|
91.9 |
|
|
|
-2 |
% |
Ultrapar’s
sales, general and administrative expenses totaled R$ 1,808.2 million in 2009, a
27% increase over 2008, mainly as a result of the consolidation of Texaco from
2Q09 onwards. Ultragaz’s sales, general and administrative expenses amounted to
R$ 381.4 million, 9% higher than that in 2008, as a consequence of an increase
in expenses related to sales campaigns, the effect of inflation on expenses and
an increase in variable compensation, partially offset by expense reduction
initiatives implemented. Sales, general and administrative expenses at Ipiranga
(including employees statutory interest) totaled R$ 1,068.2 million, a 54%
increase over 2008, mainly due to the consolidation of Texaco, including R$ 68.8
million non-recurring expenses with (i) the conversion of service stations from
the acquired network to the Ipiranga brand (R$ 31.3 million) and (ii) the
integration of operations (R$ 37.5 million). Excluding these non-recurring
expenses and the depreciation, Ipiranga’s sales, general and administrative
expenses amounted to R$ 48/m³ of product sold in the post-acquisition period
(from 2Q09 onwards), lower than the R$ 50/m³ level in 2008, reflecting the
implementation of the operational and administrative synergies plan,
particularly after the integration of Texaco’s information
technology
systems with Ipiranga’s and Ultrapar’s completed in August 2009. Oxiteno’s
sales, general and administrative expenses amounted to R$ 267.6 million, a 9%
increase over 2008, primarily as a result of increased freight expenses
resulting from higher sales volume and the effect of a weaker Real on
international freights. This increase was partly offset by expense reduction
initiatives implemented, resulting in a 2% increase of administrative expenses,
which is lower than the inflation rate in the period. Ultracargo’s sales,
general and administrative expenses amounted to R$ 90 million in 2009, a 2%
decrease from 2008, despite the 37% increase in effective storage, on the back
of the realization of operational synergies resulting from the integration of
União Terminais and of lower expenses in the transportation
segment.
Depreciation
and amortization
Total
depreciation and amortization costs and expenses in 2009 amounted to R$ 439.3
million, a R$ 64 million increase over 2008, due to the addition of the
depreciation resulting from (i) the acquisitions of União Terminais and Texaco,
(ii) Oxiteno’s expanded operations from 4Q08 onwards, and (iii) investments in
new and in the conversion of unbranded service stations at
Ipiranga.
Operational
profit
Ultrapar’s
operational profit amounted to R$ 915.1 million in 2009, a 28% increase over
2008, mainly due to the consolidation of Texaco from second quarter 2009 on.
Ultragaz’s operational profit totaled R$ 162.3 million, 85% higher than that in
2008. Ipiranga’s operational profit totaled R$ 622.6 million, 21% higher than
that in 2008. Oxiteno’s operational profit totaled R$ 40.7 million, 74% lower
than that in 2008. Ultracargo’s operational profit totaled R$ 52.5 million, 619%
higher than that in 2008.
Financial
result
Ultrapar
reported net financial expenses of R$ 278.2 million in 2009, R$ 109 million
higher than that of 2008. The increase in net financial expense in 2009 reflects
an increase of Ultrapar’s net debt, which increased from R$
1,538.3 million at the end of 2008 to R$ 2,059.6 million at the end of 2009, as
a result of acquisitions carried out, particularly the disbursement related to
the acquisition of Texaco in March, and investments in organic
expansion.
Ultrapar
ended the fiscal year 2009 with a gross debt of R$ 4,342.8 million, resulting in
a net debt of R$ 2,059.6 million, 34% higher than the company’s net debt
position at the end of 2008, but 20% lower than the net debt on March 31st, 2009,
the date of the payment for the acquisition of Texaco.
Net
earnings
Consolidated
net earnings amounted to R$ 466.7 million in 2009, 20% higher than that reported
in 2008, as a consequence of the 25% increase in EBITDA at Ultrapar, partly
offset by the increase in net debt and depreciation.
Earnings
before interest, taxes, depreciation and amortization (EBITDA)
|
|
2009
|
|
|
2008
|
|
|
Percent change
2009-2008
|
|
Ultragaz
|
|
|
281.4 |
|
|
|
210.7 |
|
|
|
34 |
% |
Ipiranga
|
|
|
777.5 |
|
|
|
603.2 |
|
|
|
29 |
% |
Oxiteno
|
|
|
144.8 |
|
|
|
210.0 |
|
|
|
-31 |
% |
Ultracargo
|
|
|
104.8 |
|
|
|
50.6 |
|
|
|
107 |
% |
Ultrapar’s
consolidated EBITDA amounted to R$ 1,354.4 million in 2009, a 25% growth over
2008, mainly as a consequence of the consolidation of Texaco from 2Q09 onwards
and the EBITDA growth at Ipiranga, Ultragaz and Ultracargo. Ultragaz’s EBITDA
totaled R$ 281.4 million, up 34% over the previous year, as a result of a
recovery in margins, mainly deriving from commercial initiatives and operational
efficiency programs implemented. Ipiranga reported EBITDA of R$ 777.5 million in
2009, an increase of 29% over 2008, mainly as a consequence of the consolidation
of Texaco from 2Q09 onwards. Excluding the R$ 68.8 million expenses with the
conversion of service stations and integration of operations, Ipiranga’s EBITDA
reached R$ 846.3 million in 2009, equivalent to an EBITDA unit margin of R$
49/m³, already close to the EBITDA unit margin of R$ 50/m³ in 2008. Oxiteno
reported EBITDA of R$ 144.8 million, a 31% decrease over 2008, mainly as a
consequence of historical costs of goods sold higher than replacement costs
until 3Q09. Oxiteno estimates that the effect of the difference between
historical and replacement costs was R$ 78 million in 2009. Ultracargo’s EBITDA
amounted to R$ 104.8 million, a 107% growth over 2008, as a consequence of (i)
the consolidation of União Terminais from 4Q08 onwards and the resulting
operational synergies, (ii) the expansions of the Aratu terminal and (iii) an
increase in the volume of products handled at the Suape terminal. In 2009,
Ultracargo’s EBITDA margin reached 31%, higher than the 18% margin reported in
2008.
Main
changes in the consolidated income statement for the year ended December 31st, 2008
compared with the year ended December 31st,
2007
Ultrapar's
financial statements for the year ending December 31, 2008 were prepared in
accordance with the accounting directives set out in the Brazilian Corporate
Law, being adopted for the first time in the fiscal year 2008 the alterations
introduced by Laws 11,638/07 and 11.941/09, as well as the CVM rules,
instructions and guidelines, which regulate them. The financial statements
referring to the fiscal year ending December 31, 2007 are shown as previously
released, without the changes introduced by the new legislation, except for the
simple reclassification of certain accounts in the balance sheet in order to
reflect the current financial statements format. In order to maintain
comparability with financial statements in periods prior to the adoption of the
accounting changes, we have highlighted in the performance analysis below the
effects of the adoption of the new law on the respective lines, and present at
the end of this section the statement of the effects of the new legislation on
Ultrapar's main accounts of the 2008 financial statements, compared to values
that would have been obtained if these modifications had not
existed.
In April
2007 Ultrapar acquired the control of various companies in the Ipiranga Group,
ending up with (i) the fuel and lubricants distribution businesses in the South
and Southeast of Brazil and related activities, (ii) EMCA and (iii) a stake in
the refining operations. The financial statements of Ultrapar consolidate all
the businesses acquired from 2Q07. Except where otherwise mentioned, Ultrapar's
financial statements for periods prior to 2Q07 do not include the operations
acquired. With the purpose of providing a comparison basis for analysis of the
evolution in the performance of Ipiranga, unaudited financial statements for
this company have been drawn up for periods prior to 2Q07 (“Ipiranga Pro-forma
figures”).
|
|
Year
ending December 31st
|
|
|
%
of net sales and services
|
|
|
Year
ending December 31st
|
|
|
%
of net sales and services
|
|
|
Percent
change
2008-2007
|
|
|
|
2008
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales and
services
|
|
|
28,268.0 |
|
|
|
100 |
% |
|
|
19,921.3 |
|
|
|
100 |
% |
|
|
42 |
% |
Cost of sales and
services
|
|
|
(26,152.3 |
) |
|
|
93 |
% |
|
|
(18,224.2 |
) |
|
|
91 |
% |
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
2,115.7 |
|
|
|
7 |
% |
|
|
1,697.1 |
|
|
|
9 |
% |
|
|
25 |
% |
Selling,
general and administrative expenses
|
|
|
(1,424.4 |
) |
|
|
5 |
% |
|
|
(1,223.2 |
) |
|
|
6 |
% |
|
|
16 |
% |
Other operating
income
|
|
|
22.1 |
|
|
|
0 |
% |
|
|
12.3 |
|
|
|
0 |
% |
|
|
80 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
713.4 |
|
|
|
3 |
% |
|
|
486.2 |
|
|
|
2 |
% |
|
|
47 |
% |
Financial
results
|
|
|
(168.8 |
) |
|
|
1 |
% |
|
|
(119.4 |
) |
|
|
-1 |
% |
|
|
41 |
% |
Other
income
|
|
|
11.2 |
|
|
|
0 |
% |
|
|
8.8 |
|
|
|
0 |
% |
|
|
27 |
% |
Income and social contribution
tax
|
|
|
(151.6 |
) |
|
|
-1 |
% |
|
|
(86.0 |
) |
|
|
0 |
% |
|
|
76 |
% |
Minority interest/equity in
earnings of affiliates
|
|
|
(4.5 |
) |
|
|
0 |
% |
|
|
(100.4 |
) |
|
|
-1 |
% |
|
|
-96 |
% |
Employees statutory
interest
|
|
|
(9.5 |
) |
|
|
0 |
% |
|
|
(7.3 |
) |
|
|
0 |
% |
|
|
- |
|
Net
income
|
|
|
390.3 |
|
|
|
1 |
% |
|
|
181.9 |
|
|
|
1 |
% |
|
|
115 |
% |
EBITDA
|
|
|
1,079.4 |
|
|
|
4 |
% |
|
|
779.4 |
|
|
|
4 |
% |
|
|
38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
375.5 |
|
|
|
1 |
% |
|
|
300.6 |
|
|
|
2 |
% |
|
|
25 |
% |
Overview on sales
volume
|
|
2008
|
|
|
2007
|
|
|
Percent change
2008-2007
|
|
Ultragaz (000
ton)
|
|
|
1,601 |
|
|
|
1,572 |
|
|
|
2 |
% |
Ipiranga (000 m3)
|
|
|
12,075 |
|
|
|
11,169 |
|
|
|
8 |
% |
Oxiteno (000
ton)
|
|
|
567 |
|
|
|
656 |
|
|
|
-14 |
% |
Ultracargo (000 m3)
|
|
|
335 |
|
|
|
279 |
|
|
|
20 |
% |
In 2008,
the Brazilian LPG market increased by 2% compared to 2007. Sales volume at
Ultragaz grew in line with the
market, amounting to a total of 1,601 thousand tons of LPG sold, highlighting
the 3% growth seen in the bottled segment, basically as a result of commercial
initiatives developed by the company. At Ipiranga, sales volume increased 8%
compared to Pro-forma volume in 2007, in line with the growth in the market in
the regions where the company has operations (South and Southeast of Brazil).
Fuel sales volume for passenger vehicles
(gasoline,
ethanol and NGV) grew by 11% as a consequence of the 14% increase in the sale of
light vehicles and of measures to improve legislation and inspection implemented
in the sector. Diesel sales volume was up by 7%, basically as a result of the
good performance in the economy. At Oxiteno, total sales amounted to 567
thousand tons in 2008, 14% lower than in 2007, as a result of (i) scheduled
maintenance and expansion stoppages by the company during 2008 and (ii) higher
glycols sales in 2007, taking advantage of the restriction in the international
supply of this product at that time. The sales mix also saw a substantial
improvement, with sales of specialty chemicals rising from 77% of total sales in
2007 to 89% in 2008. Sales volume in Oxiteno's operations abroad increased by
64% in 2008, as a result of the 33% increase in the sales volume of Oxiteno
Mexico and the acquisition of Oxiteno Andina in 3Q07. At Ultracargo, effective
storage showed an increase of 20%, as a result of expansion at the Aratu
terminal, a higher occupancy rate at the Santos terminal and consolidation of
União Terminais from 4Q08.
Net
sales and services
|
|
2008
|
|
|
2007
|
|
|
Percent change
2008-2007
|
|
Ultragaz
|
|
|
3,339.3 |
|
|
|
3,112.9 |
|
|
|
7 |
% |
Ipiranga
|
|
|
22,676.4 |
|
|
|
19,393.9 |
|
|
|
17 |
% |
Oxiteno
|
|
|
1,926.1 |
|
|
|
1,764.8 |
|
|
|
9 |
% |
Ultracargo
|
|
|
283.4 |
|
|
|
229.1 |
|
|
|
24 |
% |
Ultrapar
net sales and services amounted to R$ 28,268 million in 2008, up 42% on 2007,
basically as a consequence of the consolidation of net sales from Ipiranga from
2Q07, and the growth seen in all the company's business units. Net sales at
Ultragaz amounted to R$ 3,339.4 million, 7% higher than in 2007, as a result of
the 2% increase in sales volume and the rise in the cost of LPG used in the bulk
segment in 2008, partially offset by a more competitive market during the 1H08.
Net sales at Ipiranga totaled R$ 22,676.4 million in 2008, up 17% compared to
Pro-forma sales in 2007, as a consequence of an 8% increase in sales volume, and
a rise in diesel costs in 2008. Oxiteno reported net sales of R$ 1,926.1
million, up 9% on 2007, as a consequence of a 34% recovery in average prices in
dollar terms, result of the improved sales mix and commercial initiatives
introduced by the company over the last 12 months. This improvement in average
price was partially offset by a 6% appreciation in the Brazilian Real, and a 14%
drop in sales volume. Ultracargo's net sales amounted to R$ 283.4 million, 24%
higher than in 2007, basically as a consequence of increased storage volumes and
new integrated transport and in-house logistics operations.
Cost
of products and services
|
|
2008
|
|
|
2007
|
|
|
Percent change
2008-2007
|
|
Ultragaz
|
|
|
2,898.4 |
|
|
|
2,643.7 |
|
|
|
10 |
% |
Ipiranga
|
|
|
21,492.2 |
|
|
|
18,348.6 |
|
|
|
17 |
% |
Oxiteno
|
|
|
1,526.8 |
|
|
|
1,421.9 |
|
|
|
7 |
% |
Ultracargo
|
|
|
187.4 |
|
|
|
144.8 |
|
|
|
29 |
% |
Ultrapar's
cost of products and services amounted to R$ 26,152.3 million in 2008, an
increase of 44% on the previous year, basically as a consequence of the
consolidation of Ipiranga's cost of products sold from 2Q07, the rise in the
cost of diesel and the higher cost of LPG for the bulk segment. Ultragaz's cost
of products sold amounted to a total of R$ 2,898.4 million, a 10% increase
compared to 2007, basically as a consequence of higher sales volume and the
successive increases in the ex-refinery price for use in the bulk segment in
2008. Ipiranga's cost of products sold totaled R$ 21,492.2 million, up 17%
compared to Pro-forma figures for 2007, as a consequence of an 8% increase in
sales volume, the increase in the diesel cost, derived from the increase in the
ex-refinery price in May 2008 and the obligatory increase in the percentage of
bio-diesel added to diesel. The cost of products sold at Oxiteno totaled R$
1,526.8 million, an increase of 7% compared to 2007, basically due to higher raw
material unit costs in dollar, as a consequence of higher average oil prices,
and the cost of R$ 18 million as a result of the scheduled maintenance stoppages
at the production units during 2008. Ultracargo's cost of services provided
amounted to R$ 187.4 million, an increase of 29% on 2007, as a result of a rise
in storage volume, new integrated in-house transport and logistics operations,
and the increase in diesel prices.
Gross
profit
Ultrapar’s
gross profit amounted to R$ 2,115.7 million in 2008, a 25% increase over 2007,
mainly as a result of the increase in Ipiranga’s, Oxiteno’s and Ultracargo’s
gross profit and the consolidation of Ipiranga from second quarter 2007 on.
Ultragaz’s gross profit amounted to R$ 440.9 million, 6% lower than that in
2007. Ipiranga’s gross profit amounted to R$ 1.184.2 million, 13% higher than
that in 2007. Oxiteno’s gross profit amounted to
R$ 399.3
million, 16% higher than that in 2007. Ultracargo’s gross profit amounted to R$
96.0 million, 14% higher than that in 2007.
Sales,
general and administrative expenses
|
|
2008
|
|
|
2007
|
|
|
Percent change
2008-2007
|
|
Ultragaz
|
|
|
348.3 |
|
|
|
337.6 |
|
|
|
3 |
% |
Ipiranga
|
|
|
691.4 |
|
|
|
729.9 |
|
|
|
-5 |
% |
Oxiteno
|
|
|
246.0 |
|
|
|
237.7 |
|
|
|
3 |
% |
Ultracargo
|
|
|
91.9 |
|
|
|
70.2 |
|
|
|
31 |
% |
Ultrapar's
sales, general and administrative expenses totaled R$ 1,424.4 million in 2008,
up 16% compared to 2007, basically as a result of (i) the impact of inflation on
expenses, (ii) the consolidation of sales, general and administrative expenses
from Ipiranga from 2Q07, (iii) the increase in the cost of diesel, which had an
impact on freight expenses and (iv) an 8% increase in sales volume at Ipiranga.
Ultragaz's sales, general and administrative expenses totaled R$ 348.3 million,
3% higher than in 2007, despite the 2% increase in sales volume and the effects
of inflation on personnel costs, as a consequence of expense reduction
initiatives implemented during 2008 and higher advertising and marketing
expenses related to the company's 70th anniversary institutional campaign in
2007. Sales, general and administrative expenses (including employees’ statutory
interest) at Ipiranga totaled R$ 691.4
million, down 5% compared to Pro-forma figures for 2007, a result of
organizational optimization implemented since the acquisition and the end of
CPMF tax, partially offset by (i) an 8% increase in sales volume, (ii) an
increase in diesel costs, with an impact on freight expenses, (iii) higher
expenses with advertising and marketing, including those related to the campaign
of the Texaco acquisition and the launch of Ipirangashop.com and incentive
programs such as Clube VIP and Clube do Milhão and (iv) higher personnel
expenses as a result of annual collective wage agreements and the increase in
variable compensation in line with the improvement in earnings. Oxiteno's sales,
general and administrative expenses amounted to R$ 246.0 million in 2008, up 3%
on the previous year, as a result of higher freight expenses due to the increase
in diesel prices and the rise in personnel expenses, as a result of annual
collective wage agreement and higher variable compensation, in line with the
improvement in the company's results. Sales, general and administrative expenses
at Ultracargo totaled R$ 91.9 million in 2008, 31% higher than in 2007, as a
result of the impact of inflation on expenses, the goodwill amortization related
to the acquisition of União Terminais, of R$ 8 million, and the addition of
sales, general and administrative expenses from União Terminais from
4Q08.
Effects
of the changes in legislation: Ultrapar's sales, general and
administrative expenses in 2008 were R$ 7 million lower than the result that
would have been obtained without the changes in legislation, due to a reduction
of R$ 16 million in administrative expenses and an increase of R$ 9 million in
depreciation as a result of the consolidation of the company Serma and of the
CVM Resolution 534/08, which refers to leasing. As a consequence of this rule,
certain Ipiranga’s contracts started to be treated as financial leasing,
resulting in (i) the inclusion of its remaining balance in the company debt,
(ii) the booking of the leased goods as fixed assets, and (iii) the
appropriation of financial charges from the leasing to the company’s
results.
Depreciation
and amortization
Total
depreciation and amortization costs and expenses in 2008 amounted to R$ 375.5
million, a R$ 74.9 million increase over 2007, mainly due to (i) the
consolidation of Ipiranga from the second quarter 2007 on and of União Terminais
from the fourth quarter 2008 on and (ii) organic investments made, mainly the
start-up of additional production capacity at Oxiteno from 4Q08 on.
Operational
profit
Ultrapar’s
operational profit amounted to R$ 713.4 million in 2008, a 47% increase over
2008, mainly as a result of the increase in Ipiranga’s and Oxiteno’s operational
profit and the consolidation of Ipiranga from second quarter 2007 on. Ultragaz’s
operational profit amounted to R$ 87.9 million, 34% lower than that in 2007.
Ipiranga’s operational profit amounted to R$ 515.7 million, 54% higher than that
in 2007. Oxiteno’s operational profit amounted to R$ 154.2 million, 42% higher
than that in 2007. Ultracargo’s operational profit amounted to R$ 7.3 million,
50% lower than that in 2007.
Financial
result
Ultrapar
reported net financial expenses of R$ 168.8 million in 2008, R$ 49 million
higher than that of 2007. The increase in net financial expenses in 2008 mainly
reflects the increase of Ultrapar's average net debt, higher interest rates and
the 32% Brazilian Real depreciation during 2008, compared to an appreciation of
17% during 2007.
Ultrapar
ended the financial year 2008 with a gross debt position of R$ 3,671.9 million,
resulting in a net debt of R$ 1,538.3 million, 7% higher than the company’s net
debt position at the end of 2007.
Effects
of the changes in legislation:
Ultrapar's net financial expenses in 2008 were R$ 3 million higher than the
result that would have been obtained without the changes in legislation, as a
consequence of increases of R$ 8 million related to monetary translation of
foreign investments (CVM Resolution 534/08) and R$ 3 million related to leasing,
partially offset by reductions of R$ 8 million referring to the marking to
market of financial instruments (CVM Resolution 566/08) and R$ 1 million
referring to the booking of the transaction costs associated with the issuance
of securities (CVM Resolution 556/08).
Net
earnings
Consolidated
net earnings amounted to R$ 390.3 million 2008, 115% higher than that reported
in 2007, as a consequence of the 38% rise in EBITDA at Ultrapar and the
transitory effects of minority interest related to the acquisition of Ipiranga
in 2007.
Effect
of the changes in legislation: Ultrapar's net earnings in 2008 were R$ 2
million higher than the figure that would have been obtained without the changes
in legislation, as a consequence of the effects mentioned in the paragraphs of
the financial result and the sales, general and administrative
expenses.
Earnings
before interest, taxes, depreciation and amortization (EBITDA)
|
|
2008
|
|
|
2007
|
|
|
Percent change
2008-2007
|
|
Ultragaz
|
|
|
210.7 |
|
|
|
251.7 |
|
|
|
-16 |
% |
Ipiranga
|
|
|
603.2 |
|
|
|
417.0 |
|
|
|
45 |
% |
Oxiteno
|
|
|
210.0 |
|
|
|
157.4 |
|
|
|
33 |
% |
Ultracargo
|
|
|
50.6 |
|
|
|
43.1 |
|
|
|
17 |
% |
Ultrapar's
consolidated EBITDA amounted to R$ 1,079.4 million in 2008, up 39% compared to
2007, basically as a consequence of EBITDA growth at Ipiranga and Oxiteno, as
well as the consolidation of the results of Ipiranga and União Terminais,
respectively, from 2Q07 and 4Q08. Ultragaz's EBITDA totaled R$ 210.7 million,
16% down on the previous year, basically due to a more competitive market in the
bottled gas segment in the first half of 2008. Ipiranga reported EBITDA of R$
603.2 million in 2008, up 45% compared to Pro-forma EBITDA for 2007, as a result
of the 8% increase in sales volume, with a consequent increase in operational
leverage, and a 6% reduction in sales, general and administrative expenses.
Oxiteno reported EBITDA of R$ 210 million, up 33% compared to 2007, as a result
of a recovery in average prices in dollars, as a consequence of an improved
sales mix and commercial initiatives developed by the company over the last 12
months, as well as the depreciation in the Brazilian Real in the last quarter of
the year. EBITDA at Ultracargo amounted to R$ 50.6 million, up 18% compared to
2007, basically as a consequence of the expansion to the Aratu terminal, an
increase in the volumes of products handled at the Santos terminal, and the
addition of the volume from União Terminais’ operations from 4Q08.
Effects
of the changes in legislation:
Ultrapar's EBITDA in 2008 was R$ 16 million higher than the result that would
have been obtained without the changes in legislation, as a consequence of the
increase of the financial leasing and the beginning of the consolidation of the
company Serma in the results of the company, both mentioned in the sales,
general and administrative expenses.
|
a.
|
company’s operating
results, especially:
|
|
i.
|
description
of major components of revenues
|
More than
90% of consolidated net revenues of Ultrapar is generated by the fuel and LPG
distribution businesses. Therefore, the main components of these revenues come
from diesel, gasoline and ethanol sales by Ipiranga and from LPG sales by
Ultragaz. See “Item 10.2.c. effect of inflation, changes in prices of main
inputs and products, foreign exchange and interest rates on the company’s
operating results and financial results”.
|
ii.
|
factors
that materially affected operating
results
|
See “Item
10.1.h. Main changes in each item of the financial statements – Significant
changes in consolidated income statement”.
|
b.
|
changes in revenues
attributable to changes in prices, exchange rates, inflation, changes in
volumes and introduction of new products and
services
|
See “Item
10.1.h. Main changes in each item of the financial statements – Significant
changes in consolidated income statement” and See “Item 10.2.c. effect of
inflation, changes in prices of main inputs and products, foreign exchange and
interest rates on the company’s operating results and financial
results”.
|
c.
|
effect of inflation,
changes in prices of main inputs and products, foreign exchange and
interest rates on the company’s operating results and financial
results
|
LPG
business
Between
2003 and the end of 2007, LPG prices charged to LPG distributors in Brazil have
been stable, despite increases in oil and LPG prices in the international
markets, which were partially offset by the appreciation of the real compared to
the U.S. dollar, reducing the difference between LPG prices in Brazil and in the
international markets. However, in 2008 Petrobras increased LPG refinery price
for commercial and industrial usage by 15% in January, an additional 10% in
April and 6% in July.
The LPG
refinery price for residential use remained unchanged since May 2003. In the
last few years, Petrobras had as a practice not to immediately reflect in the
Brazilian market the volatility of international prices of oil and its
derivatives. We cannot guarantee that this trend will continue.Any sharp
increase in LPG prices charged to LPG distributors could have an impact on
Ultragaz’s results if it is unable to maintain its operational margins or sales
volume.
LPG bulk
sales are correlated to economic growth, thus an acceleration or deceleration in
the Brazilian GDP growth can affect our sales volume, once this segment
represents about 30% of the volume sold by Ultragaz. The bottled LPG is an
essential good and, therefore, it has a low correlation with economic
performance.
Chemical and petrochemical
business
The
specialty chemicals volume in the Brazilian market is correlated to economic
growth and therefore an acceleration or deceleration in the Brazilian GDP growth
can affect our sales volume, as Oxiteno’s specialty chemicals sales in Brazil
represented more than 60% of its total sales in 2009. By the end of 2008,
Oxiteno completed certain capacity expansions leading to an increase in exports
sales and hence in the portion of its volume sold in outside Brazil. As the
Brazilian market grows, Oxiteno aims at increasing the volume sold in the
domestic market once the logistics costs are usually lower than logistics cost
of sales outside Brazil. Additionally, Oxiteno is currently investing in
capacity expansions in the ethylene oxide and the ethoxylates units at Camaçari,
Bahia, that will add 90 and 70 thousand tons/year, respectively, to the current
capacity, which will likely increase the volume sold.
A large
portion of Oxiteno’s products prices are linked to to U.S. dollar. Therefore, a sharp
appreciation or depreciation could have an impact on Oxiteno’s revenues in the
future. Since September 2008, the worsening of the global financial crisis led
to a sharp reduction in the flow of capital to Brazil, reversing the real
appreciation trend in place since 2003. However, during the following quarters,
measures adopted by the Brazilian government to minimize the impacts of the
crisis started to reflect on the economy, driving the inflow of foreign
investments in the country, thus contributing to a 25% appreciation of the
Brazilian currency against the U.S. dollar in 2009 - the highest appreciation in
the decade, closing the year at a rate of R$ 1.74/US$. From December 31st, 2009
to March 26th, 2010,
the Brazilian real
depreciated 5% against the U.S. dollar. We cannot predict whether the real will keep this
trend.
Oxiteno’s
main raw material is the ethylene, which is produced from naphtha in Brazil.
Naphtha prices in Brazil fluctuate with oil prices, which sharply decreased in
the international markets in late 2008. However, in 2009, the initiatives
adopted by several governments to minimize the effects of the crisis also
contributed to the beginning of the economic recovery of certain countries,
specially the emerging markets, with a recovery of the demand for commodities
and a consequent upward trend in their prices, notably oil, which closed the
year quoted at US$ 75 per barrel, an 80% increase compared with its 2008 closing
price. We cannot predict whether oil and ethylene prices will keep this trend. A
sharp variation in ethylene prices could have an impact on Oxiteno’s results of
operations if it is unable to maintain its operational margins.
The
increase in demand for chemical and petrochemical products in Brazil during the
last years and the ongoing integration of regional and world markets have
contributed to the increasing integration of the Brazilian petrochemical
industry into the international petrochemical marketplace. As a consequence,
events affecting the petrochemical industry worldwide could have a material
effect on our business and results of operations. The chemical industry
performance worldwide was strongly affected by the world financial crisis in
2009, which caused the demand for chemical products to decrease in several
countries. Due to the faster recovery of the Brazilian economy, Oxiteno faced
tougher competition from certain foreign producers in 2009.
Fuels
distribution
In the
recent past, the combined sales of gasoline, ethanol and natural gas in Brazil
have been correlated to the growth of light vehicle fleet. In 2009, as part of
the Brazilian government plan to mitigate the effects of global financial
crisis, some measures were implemented to incentivize the economic activity,
such as the federal Excise Tax on Manufactured Products (IPI) tax break on
durable goods. Such measures, associated with a gradual recovery of credit
availability, resulted in a positive response from certain sectors of economy,
notably the automotive industry, which in 2009 reported another sales record
with more than 3 million vehicles licensed, leading to an estimated fleet
increase of 8% in the year. The removal of tax breaks to the automotive industry
is scheduled for March 31st, 2010,
which may cause an increase in vehicles prices and consequently, a reduction in
demand. On the other hand, Brazilian credit data until January 2010, shows
positive trend when compared to last year which positively influences the
vehicles demand. Additionally, the current ratio of inhabitants per vehicle in
Brazil is still low when compared to the rate seen in countries with similar
level of development. According to 2007 data released by ANFAVEA, last available
data, the penetration of light vehicles in Brazil is about 14% of total
inhabitants, while in Argentina is 21% and in Mexico is 24%. Diesel sales, which
in 2009 accounted for more than 50% of the volume sold by Ipiranga, have
historically been correlated with the economic performance. In 2009, the
Brazilian diesel market, according to ANP data, decreased over the first three
quarters of 2009 compared to same periods in 2008, following the change in GDP.
In the fourth quarter of 2009, the volume of diesel sold in Brazil was 7% higher
than the same period of last year, following the trend of recovery of economic
growth. The increase in fuels consumption could have a positive effect on the
future volume sold by the company and on its results, but we cannot guarantee
that this trend will continue.
In the
last few years, Petrobras had as a practice not to immediately reflect in the
Brazilian market the volatility of international prices of oil and its
derivatives. We cannot guarantee that this trend will continue. From September
2005 to May 2008, gasoline and diesel prices remained unchanged. In May 2008,
Petrobras increased diesel and gasoline prices by 15% and 10%, respectively, in
order to adjust internal prices for the successive increases in international
oil prices. The Brazilian government simultaneously announced a reduction in
CIDE tax over these products, fully offsetting the gasoline price increase and
partially offsetting the diesel price increase. However, with the worsening of
the global financial crisis and the consequent slowdown in the global economy,
prices of commodities fell sharply, and the gasoline and diesel prices in the
foreign markets, during the first half of 2009, remained lower than those
charged in Brazil. In June 2009, Petrobras reduced diesel and gasoline prices by
15% and 4.5%, respectively, and the Brazilian government simultaneously
announced an increase in CIDE tax over these products. As a result of CIDE’s
decreases, the increase in the prices charged to the distributors was partially
offset to diesel and fully offset to gasoline. We cannot guarantee that this
trend will continue.
Effects of inflation over
our operational costs and expenses
Ultrapar’s
operational costs and expenses are substantially in reais, thus are influenced by
the general price levels in the Brazilian economy. In 2007, 2008 and 2009, the
variation of IPCA (Consumer Prices Index), the index adopted by the Brazilian
government to set inflation targets, was 4.3%, 5.9% e 4.5%,
respectively.
Financial
Result
The main
macroeconomic factors that influence the financial results of Ultrapar are the
foreign exchange and interest rates.
Foreign exchange
rate
Most
operations of Ultrapar are located in Brazil and, therefore, the reference
currency for currency risk management is the real. Currency risk
management is guided by neutrality of currency exposures and considers the
transactional, accounting, and operational risks of Ultrapar and its
subsidiaries to changes in exchange rates. Ultrapar considers as its main
currency exposures the assets and liabilities in foreign currency and the
short-term net sales in foreign currency of Oxiteno. Ultrapar and its
subsidiaries use exchange rate hedging instruments (especially between the real
and the U.S. dollar) available in the financial market to protect their assets,
liabilities, receipts and disbursements in foreign currency, in order to reduce
the effects of changes in exchange rates on their results and cash flows in
reais, within the
exposure limits set by its financial resources, tools and risks management
policy. Such foreign exchange hedging instruments have amounts, periods, and
rates substantially equivalent to those of assets, liabilities, receipts and
disbursements in foreign currency to which they are related. Assets and
liabilities in foreign currency are stated below, translated into reais as of December 31st, 2009
and December 31st,
2008:
Amounts in millions of
Reais
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Assets in foreign
currency
|
|
|
|
|
|
|
Financial assets in foreign
currency (except instrument of protection)
|
|
|
231.6 |
|
|
|
575.0 |
|
Foreign trade receivables, net of
advances on export contract and provision for loss
|
|
|
40.1 |
|
|
|
52.0 |
|
Advances to foreign suppliers, net
of accounts payable arising from imports
|
|
|
43.4 |
|
|
|
79.1 |
|
Investments in foreign
subsidiaries
|
|
|
59.8 |
|
|
|
111.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
374.9 |
|
|
|
818.0 |
|
|
|
|
|
|
|
|
|
|
Liabilities in foreign
currency
|
|
|
|
|
|
|
|
|
Financing in foreign
currency
|
|
|
(724.8 |
) |
|
|
(1,171.4 |
) |
|
|
|
|
|
|
|
|
|
Currency hedging
instruments
|
|
|
227.9 |
|
|
|
242.0 |
|
|
|
|
|
|
|
|
|
|
Net asset (liability)
position
|
|
|
(122.0 |
) |
|
|
(111.4 |
) |
|
|
|
|
|
|
|
|
|
Net asset (liability) position –
RPR¹
|
|
|
87.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset (liability) position –
Total
|
|
|
(35.0 |
) |
|
|
|
|
¹ Amount
disclosed on December 31st, 2009 due to its magnitude and to RPR having
independent financial management. The net asset position of RPR reflects the
amount of R$ 126 million of contracted exchange rate swaps primarily to protect
the future import of oil, net of (i) R$ 17 million of financing in foreign
currency and (ii) R$ 22 million of suppliers in foreign
currency.
Interest
Rate
The
financial investments of Ultrapar are primarily held in transactions linked to
the Interbank Certificate of Deposit – “CDI”. Funding primarily results from
financing from BNDES and other development agencies, debentures substantially
indexed to the TJLP and to CDI and funds raised in foreign currency. Ultrapar
does not actively manage risks associated with changes in the level of interest
rates and attempts to maintain its financial assets and liabilities at floating
rates.
10.3.
|
Comments
on material effects that the events below have caused or are expected to
cause on the company’s financial statements and
results:
|
|
a.
|
introduction or
disposal of operating
segment
|
There was
no relevant introduction or disposal of operating segment in the fiscal year
2009.
|
b.
|
establishment,
acquisition or sale of ownership
interest
|
It is
part of Ultrapar’s strategy the growth of its business, growth that has
historically occurred through organic investments and acquisitions of equity
interest. The main acquisition of equity interest carried out in 2009 is
described below. The main effects of acquisitions on Ultrapar’s financial
statements were:
-
Increase in revenues, costs and expenses
-
Increase in operating margins due to the greater scale and the synergies through
acquisitions
-
Increase in Company’s working capital and property, plant and equipment
accounts
-
Increase in Company’s net debt, due to the disbursement to Texaco’s and União
Terminais’ acquisitions. See “Item 10.1.h. main changes in each item of the
financial statements – Significant changes in consolidated income statement” for
more information.
In August
2008, Ultrapar announced the signing of the sale and purchase agreement for the
acquisition of Texaco’s fuel distribution business in Brazil. On March 31st, 2009,
Ultrapar closed the acquisition of Texaco through the disbursement of R$ 1,106
million, in addition to the US$ 38 million deposit made to Chevron in August
2008. In August 2009, Ultrapar paid R$ 162 million related to the expected
working capital adjustment, reflecting the increased working capital effectively
received by Ultrapar on the closing date of the acquisition. The results of
Texaco started to be consolidated in Ultrapar's financial statements from April
1st,
2009 onwards. Ultrapar's financial statements in periods prior to 2Q09 do not
include Texaco’s results.
Texaco’s
acquisition is part of Ultrapar’s strategy to increase its operational scale in
the fuel marketing business and expand its operations to the Mid-West, Northeast
and North regions of Brazil. The combination with Texaco will create a
nationwide fuel marketing business, strengthening its competitiveness through a
larger operational scale and implementation of Ipiranga’s business model in the
expanded network, with a range of differentiated products and services stations,
bringing benefits to consumers and retailers. Additionally, Texaco’s acquisition
leads to Ipiranga a better positioning to growth, allowing the company to expand
its operations to the Mid-West, Northeast and North, regions with consumption
growth above the national average, and brings new commercial opportunities
arising from the national coverage.
|
c.
|
unusual events or
transactions.
|
Not
applicable
|
a.
|
significant changes in
accounting practices
|
When
preparing the consolidated financial statements related to 2008, Ultrapar's
management adopted for the first time changes in the corporate law introduced by
Law 11,638/07 of December 28th, 2007
and Provisional Measure 449/08 of December 3rd, 2008
(promulgated as Law 11,941/09 on May 27th, 2009),
both amending and repealing existing provisions and adding new provisions to Law
6,404/76 (Brazilian Corporate Law) to adapt the accounting policies adopted in
Brazil to the International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB).
|
b.
|
significant effects of
changes in accounting
practices
|
The
effects of Law 11,638/07 and Law 11,941/09 on financial statements as of
December 31st, 2009
are shown in the following chart. Additional information about these changes can
be obtained in our financial statements filed on February 24th, 2009
and March 11th, 2008
with the CVM.
Effects
of the implementation of Laws 11,638/07 and 11,941/09 (fomer Provisional
Measure 449/08) on the business units' EBITDA
|
|
|
|
|
|
|
Ipiranga
|
|
|
Ultragaz
|
|
|
Oxiteno
|
|
|
Ultracargo
|
|
|
Others/Elim.
|
|
|
Ultrapar
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
before the implementation of Laws 11,638/07 and 11,941/09
|
|
|
|
592.8 |
|
|
|
210.7 |
|
|
|
210.0 |
|
|
|
50.6 |
|
|
|
(0.3 |
) |
|
|
1,063.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts
for financial leasing operations recognized as property, plant &
equipment and debt
|
CVM
554 / CPC 06
|
|
|
10.4 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.1 |
|
|
|
10.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidation
of the results of the company Serma on the financial
statements
|
CVM
565 / CPC 13
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5.1 |
|
|
|
5.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
effects
|
|
|
|
10.4 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5.1 |
|
|
|
15.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
according to audited financial statements on December 31st,
2008 (after the implementation of the Laws 11,638/07 and
11,941/09)
|
|
|
|
603.2 |
|
|
|
210.7 |
|
|
|
210.0 |
|
|
|
50.6 |
|
|
|
4.9 |
|
|
|
1,079.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Main
effects of the implementation of Laws 11,638/07 and 11,941/09 on the
consolidated financial statements (R$ million)
|
|
|
|
|
|
|
EBITDA
|
|
|
Financial
results
|
|
|
Net
earnings
|
|
|
Net
debt
|
|
|
Long
term assets
|
|
|
Shareholder's
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Figures
before the implementation of Laws 11,638/07 and 11,941/09
|
|
|
|
1,063.9 |
|
|
|
(166.3 |
) |
|
|
388.0 |
|
|
|
1,524.3 |
|
|
|
3,726.3 |
|
|
|
4,646.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts
of financial leasing operations recognized as fixed assets and
debt
|
CVM
554 / CPC 06
|
|
|
10.5 |
|
|
|
(2.9 |
) |
|
|
2.4 |
|
|
|
25.4 |
|
|
|
29.0 |
|
|
|
2.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidation
of the company Serma and equity in income and affiliated companies of
Metalplus* in the financial statements
|
CVM
565 / CPC 13
|
|
|
5.1 |
|
|
|
(0.2 |
) |
|
|
- |
|
|
|
(0.2 |
) |
|
|
14.9 |
|
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
translation impact of the net investment on some foreign subsidiaries
recorded directly in the account accumulated translation
adjustment in the Shareholder's equity
|
CVM
534 / CPC 02
|
|
|
- |
|
|
|
(8.3 |
) |
|
|
(8.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marking
to market of financial and foreign exchange and interest hedging
instruments
|
CVM
566 / CPC 14
|
|
|
- |
|
|
|
7.7 |
|
|
|
7.3 |
|
|
|
(1.6 |
) |
|
|
- |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
costs and premiums in the issuance of securities and securities recognized
as debt reducer
|
CVM
556 / CPC 08
|
|
|
- |
|
|
|
1.2 |
|
|
|
0.9 |
|
|
|
(9.6 |
) |
|
|
- |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment
at present value of credit balances of ICMS on the purchase of fixed
assets (CIAP)
|
CVM
564 / CPC 12
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5.5 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
effects
|
|
|
|
15.5 |
|
|
|
(2.6 |
) |
|
|
2.3 |
|
|
|
14.0 |
|
|
|
49.5 |
|
|
|
4.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Figures
according to audited financial statements on December 31st,
2008 (after the implementation of Laws 11,638/07 and
11,941/09)
|
|
|
|
1,079.4 |
|
|
|
(168.8 |
) |
|
|
390.3 |
|
|
|
1,538.3 |
|
|
|
3,775.7 |
|
|
|
4,650.1 |
|
*
Metalúrgica Plus S/A – Former producer of gas cylinders, not currently
operating
|
c.
|
exceptions and
emphasis present in the auditor’s
opinion
|
None.
10.5.
|
Comments
on company’s critical accounting
policies
|
The
presentation of our financial condition and results of operations requires our
management to make judgments regarding the effects of matters that are
inherently uncertain on the carrying value of our assets and liabilities and may
affect the reported amount of them as well as our revenues and expenses. Actual
results may differ from those estimated under different variables, assumptions
or conditions, even though our management believes that its accounting estimates
are reasonable. The following paragraphs review the critical accounting
estimates that management considers most important for understanding our
financial condition, results of operations and cash flows. An accounting
estimate is considered a critical accounting estimate if it meets the following
criteria:
|
·
|
The
accounting estimate requires management to make assumptions about matters
that were highly uncertain at the time the accounting estimate was made;
and
|
|
·
|
Different
estimates that management reasonably could have used for the accounting
estimate in the current period, or changes in the accounting estimate that
are reasonably likely to occur from period to period, would have a
material impact on our financial condition, results of operations or cash
flows.
|
We have
identified the following five of our accounting policies as
critical:
Allowance for doubtful
accounts
We
maintain allowances for doubtful accounts for estimated losses resulting from
the subsequent inability of our customers to make required payments. The
allowance for doubtful accounts is recorded in an amount we consider sufficient
to cover any probable losses on realization of our accounts receivable from our
customers, as well as other receivables, and is included as selling expenses; no
adjustment is made to net sales and services revenue. In order to establish the
allowance for doubtful accounts, our management constantly evaluates the amount
and characteristics of our accounts receivable. When significant delays occur
and the likelihood of receiving these payments decreases, a provision is made.
In case receivables in arrears are guaranteed or there are reasonable grounds to
believe they will be paid, no provision is made. If the financial conditions of
our customers were to deteriorate, resulting in an impairment of their ability
to make payments, additional allowances would be required in future periods.
However, because we cannot predict with certainty the future financial stability
of our customers, we cannot guarantee that our reserves will continue to be
adequate. Actual credit losses may be greater than the allowance registered,
which could have a significant impact on our selling expenses.
Deferred income tax and
social contribution
We
recognize deferred tax assets and liabilities which do not expire, arising from
tax loss carryforwards, temporary add-backs, revaluation of property, plants and
equipment and other procedures. We periodically review the deferred tax assets
for recoverability and establish a valuation allowance, as required, based on
historical taxable income, projected future taxable income, and the expected
timing of the reversals of existing temporary differences. In the event we or
one of our subsidiaries operate at a loss or are unable to generate sufficient
future taxable income, or if there is a material change in the actual effective
tax rates or time period within which the underlying temporary differences
become taxable or deductible, we evaluate the need to establish a valuation
allowance against all or a significant portion of our deferred tax assets,
resulting in an increase in our effective tax rate, thereby decreasing net
income. A high degree of management judgment is required in determining any
valuation allowance. The principal uncertainty relates to the likelihood of
future taxable income from the subsidiary that generated the deferred tax asset.
A change in our projections of profitability could result in the need to record
a valuation allowance against deferred tax assets, resulting in a negative
impact of future results.
Contingent
liabilities.
We are
currently involved in certain legal and administrative proceedings that arise
from our normal course of business. We believe that the extent to which these
contingencies are recognized in our consolidated financial statements is
adequate. It is our policy to record accrued liabilities in regard to
contingencies that can be reasonably estimated and could have a material adverse
impact on the result of our operations or our financial condition, to the extent
not covered by insurance, and that are likely to occur in the opinion of our
management, based on information available to the Company including information
obtained from our legal advisors. Future results of operations could be
materially affected by changes in our assumptions, by the effectiveness of our
strategies
relating to these proceedings, by future developments in each matter being
discussed or by changes in approach, such as a change in settlement strategy in
dealing with these matters.
Fair value of financial
instruments
Our
financial instruments are classified as follows:
|
·
|
Measured
at fair value through income: financial assets held for trading, that is,
purchased or created primarily for the purpose of sale or repurchase in
the short term and derivatives. Changes in fair value are recorded as
income, and the balances are stated at fair
value.
|
|
·
|
Held
to maturity: non-derivative financial assets with fixed payments or
determinable payments with fixed maturities for which the entity has the
positive intention and ability to hold to maturity. The interest earned is
recorded as income, and balances are stated at acquisition cost plus the
interest earned.
|
|
·
|
Available
for sale: non-derivative financial assets that are designated as available
for sale or were not classified into other categories. The interest earned
is recorded as income, and the balances are stated at fair value.
Differences between fair value and acquisition cost plus the interest
earned are recorded in a specific account of the shareholders’ equity.
Gains and losses recorded in the shareholders’ equity are included in
income, in case of prepayment.
|
|
·
|
Loans
and receivables: non-derivative financial instruments with fixed payments
or determinable payments not quoted in active markets, except: (i) those
which the entity intends to sell immediately or in the short term and
which the entity classified as measured at fair value through income; (ii)
those classified as available for sale; or (iii) those the holder of which
cannot substantially recover its initial investment for reasons other than
credit deterioration. The interest earned is recorded as income, and
balances are stated at acquisition cost plus the interest
earned.
|
Certain
derivative financial instruments used to hedge against changes in interest rates
were designated as cash flow hedges for purposes of measuring their fair value.
In the case of derivatives designed to cash flow hedge of the variation in
interest rates, the difference between the fair value of the financial
instrument and its value plus interest earned is recognized as a valuation
adjustment in shareholders’ equity, not affecting the income statement. In the
case of foreign exchange derivatives designated by subsidiary RPR for protection
of future cash flows, the effect of variation in the derivative is posted to the
valuation adjustment in shareholders’ equity until the time when the hedged item
affects the income statement. The difference between the fair value of
derivative and updated cost is recognized directly in the income of the
subsidiary. Gains and losses recorded in the shareholders’ equity are included
in income, in case of prepayment.
In order
to estimate fair values, we consider several variables, such as interest rates,
discount rates, foreign exchange rates and future cash flows. Our most important
sources of information concerning these variables are the market projections of
future exchange and interest rates provided by the BM&FBovespa. We believe
BM&FBovespa to be the most adequate and reliable source of information
available for our calculations. However, given the volatility inherent in
financial markets, estimates concerning the variables used to calculate fair
values are subject to constant change. As a consequence, our judgment related
to, among other issues, the behavior of these variables, the selection of
sources of information and the timing of calculation, directly affects the fair
values of our financial instruments and the amount of gains or losses recorded
in the income statement.
Pension and other
post-retirement benefits
Ultrapar
and its subsidiaries offer their employees a defined contribution pension plan,
managed by Ultraprev — Associação de Previdência
Complementar. Under the terms of the plan, the basic contribution of each
participating employee is defined annually by the participant between 0% and 11%
of his or her salary. The sponsoring companies provide a matching contribution
to the basic contribution. As participants retire, they may opt to receive
monthly: (i) a percentage varying between 0.5% and 1.0% of the fund accumulated
in their names at Ultraprev, or (ii) a fixed amount that will extinguish the
fund accumulated in their names in a period between 5 and 25 years. As such,
neither Ultrapar nor its subsidiaries assume responsibility for guaranteeing
amounts or periods of benefits for the participants that retire.
Ipiranga
and RPR recognized a provision for post-employment benefits mainly related to
seniority bonus, payment of Severance Pay Fund, and health and life insurance
plan for eligible retirees. The amounts related to such benefits were determined
based on a valuation conducted by an independent actuary and are recorded in the
financial statements in accordance with Resolution CVM 371/2000.
Significant
actuarial assumptions adopted include:
Economic
Factors
|
•
|
Discount
rate for the actuarial obligation at present value - 10.86% per
annum
|
|
•
|
Expected
long-term rate of return on assets - 10.86% per
annum
|
|
•
|
Average
projected salary growth rate - 6.08% per
annum
|
|
•
|
Inflation
rate (long term) - 4.0% per annum
|
|
•
|
Growth
rate of medical services - 8.16% per
annum
|
Demographic
factors
|
•
|
Mortality
Table - AT 2000 Basic decreased by 10%
(*)
|
|
•
|
Disabled
Mortality Table - RRB 1983
|
|
•
|
Disability
Table - RRB 1944 modified
|
|
•
|
Inflation
rate (long term) - 4.0% per annum
|
|
•
|
Growth
rate of medical services - 8.16% per
annum
|
|
(*)
|
CSO-80
mortality table was used for the life insurance
benefit.
|
10.6.
|
Discussion
on internal controls adopted to ensure the formulation of accurate
financial statements:
|
|
a.
|
Level of efficiency of
such controls, indicating any potential misstatements and measures to
correct them
|
Ultrapar
is a company listed on the New York Stock Exchange (NYSE) with Level III ADRs,
and maintains its internal controls standards in compliance with the
requirements of the Sarbanes-Oxley Act.
Ultrapar’s
management annually evaluates the internal controls over financial reporting
under the supervision of our Chief Executive Officer or CEO and Chief Financial
Officer, or CFO. Management evaluates the effectiveness of our internal controls
over financial reporting based on the criteria set out in the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”) framework. Based on
those criteria, our management believes that our internal controls over
financial reporting are adequate and effective, providing reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements.
|
b.
|
Deficiencies and
recommendations on internal controls in the independent auditor’s
report
|
None.
10.7.
|
Public
offerings for distribution of
securities:
|
Not
applicable.
10.8.
|
Issuer’s
off-balance sheet items:
|
|
a.
|
Assets and liabilities
held by the issuer, whether directly or indirectly, off-balance
sheet:
|
|
i.
|
Operating
leases, assets and liabilities
|
The
subsidiaries IPP and Serma have operating lease contracts for the use of
computer equipment. Until September 2009, the subsidiary Tropical had operating
lease contract related to the use of transportation equipment (trucks). These
contracts have terms of 36 months. The subsidiaries have the option to purchase
the assets at a price equal to the fair price on the date of option, and
management does not intend to exercise such option. The future disbursements
(installments), assumed under these contracts, total approximately:
Maturity
|
2009
|
Up
to 1 year
|
554
|
More
than 1 year
|
692
|
Total
|
1,246
|
The total
payments of operating lease recognized as expense for the period was R$ 909
thousand.
|
ii.
|
receivables
portfolios over which the entity has risks and liabilities, indicating
respective liabilities
|
Not
applicable
|
iii.
|
future
purchase and sale of products or services
contracts
|
See “Item
10.8.b. Other off-balance sheet arrangements”.
|
iv.
|
unfinished
construction contracts
|
Not
applicable
|
v.
|
other
future financing agreements
|
Not
applicable
|
b.
|
Other off-balance
sheet arrangements
|
The
following table shows our main off-balance sheet arrangements on December
31st,
2009:
|
|
Payment
due by period
|
Contractual
Obligations (off-balance sheet)
|
Total
|
up
to
1
year
|
between
1
and 3 years
|
between
3
and 5 years
|
more
than
5
years
|
Estimated
planned funding of pension and other postretirement benefit
obligations(1)
|
309
|
|
26
|
28
|
243
|
Purchase
obligations – raw material(2)
|
3,207
|
223
|
512
|
527
|
1,945
|
Purchase
obligations – utilities(3)
|
58
|
5
|
14
|
15
|
24
|
Operating
leases(4)
|
89
|
|
13
|
13
|
56
|
Royalties(5)
|
3
|
1
|
1
|
1
|
0
|
|
3,667
|
248
|
566
|
584
|
2,269
|
|
(1)
|
The
estimated payment amount was calculated based on a 4% inflation
assumption.
|
|
(2)
|
Oxiteno
Nordeste has a supply contract with Braskem, which establishes a minimum
quarterly consumption level of ethylene and establishing conditions for
the supply of ethylene until 2021. Under the terms of this agreement,
Oxiteno is currently required to purchase at least 190 thousand tons this
year and from 2011 will have to purchase at least 220 thousand tons. After
the conclusion of the ethylene oxide production capacity expansion at
Oxiteno’s Camaçari plant in 2010, Braskem will be required to supply
Oxiteno with at least 235,000 tons of ethylene per year until 2021. Should
the minimum purchase commitment not be met, the subsidiary would be liable
for a fine of 40% of the current ethylene price for the quantity not
purchased. The minimum purchase commitment clause is in renegotiation with
Braskem, including the minimum purchase commitment for 2009. On August
1st,
2008, Oxiteno S.A. signed an Ethylene Supply Agreement with Quattor, valid
until 2023, which establishes and regulates the conditions for supply of
ethylene to Oxiteno based on the international market for this product.
The minimum purchase is 19,800 tons of ethylene semiannually. In case of
breach of the minimum purchase commitment, the subsidiary agrees to pay a
penalty of 30% of the current ethylene price, to the extent of the
shortfall.
|
|
(3)
|
The
purchase obligation relates to long-term contracts under which Oxiteno is
required to purchase a minimum amount of energy
annually.
|
|
(4)
|
Tequimar
contracts with Companhia de Docas do Estado da Bahia and with Complexo
Industrial Portuário Governador Eraldo Gueiros, in connection with its
port facilities in Aratu and Suape, respectively. Such contracts establish
a minimum cargo movement of products of 1,000,000 tons per year in Aratu,
effective through 2022 and 250,000 tons per year in Suape, effective
through 2027. With the acquisition of the assets of Puma, Tequimar assumed
another contract with the Complexo Industrial Portuário Governador Eraldo
Gueiros, which establishes an additional minimum cargo movement of
products of 400,000 tons per year in Suape, until 2029. If the annual
movement is less than the minimum contractual movement, the subsidiary is
liable to pay the difference between the effective movement and the
minimum contractual movement based on the port tariff rates on the date
established for payment. As of December 31st,
2009, these rates were R$ 5.79 for Aratu and R$ 1.38 for Suape. The
company has been in compliance with the minimum movement of products since
the inception of the
contracts
|
|
(5)
|
Corresponds
to a franchise contract with am/pm under which Ipiranga is required to pay
minimum royalty fees until
2015.
|
Additionally,
our subsidiaries have provided guarantees to financial institutions related to
amounts owed to those institutions by certain of their customers (vendor
financing). There exists no recourse provision that would enable us or our
subsidiaries to recover any amount paid to the financial institutions under
these guarantees. In the event that the financial institutions exercise these
guarantees, we are entitled to recover the amount paid directly from our
customers under the vendor contracts. As of December 31st, 2009,
we did not record any losses or liability on our consolidated financial
statements related to these guarantees.
Vendor
|
|
2009
|
Term
|
Less
than 211 days
|
Maximum
amount of future payments related to these collaterals
|
R$
20.2 million
|
10.9.
|
Off-balance
sheet items:
|
|
a.
|
how such items change
or may change revenues, expenses, operating income, financial expenses or
other items of the issuer’s financial
statements
|
See “Item
10.8.b. Other off-balance sheet arrangements”.
|
b.
|
nature and purpose of
the transaction
|
See “Item
10.8.b. Other off-balance sheet arrangements”.
|
c.
|
nature and amount of
obligations assumed by and rights conferred upon the issue due to the
transaction
|
See “Item
10.8.b. Other off-balance sheet arrangements”.
10.10.
|
Discussion
on the main elements of the issuer’s business
plan:
|
|
i.
|
Quantitative
and qualitative description of the investments in progress and the
estimated investments
|
Following
its strategy of expanding scale and increasing the competitiveness of its
businesses, Ultrapar invested R$ 1,946 million in 2009, of which R$ 585 million
refer to organic investments and R$ 1,361 million refer to the acquisition of
Texaco. Regarding organic investments, R$ 105 million were invested in Ultragaz,
focusing on renewal and replacement of LPG bottles and on new LPG clients.
Investments in Ipiranga reached R$ 222 million, primarily to the conversion of
unbranded gas stations, new service stations, renewal of contracts and
improvement in service stations and distribution network. Of the total amount
invested, R$ 117 million were related to additions to property, plant and
equipment and R$ 105 million were related to financing and bonuses to clients,
net of repayments. Investments in Oxiteno reached R$ 164 million, focused on
projects to expand the production capacity, particularly the capacity expansion
of ethylene oxide and ethoxylates at Camaçari and investments aiming at
productivity gains. Investments in Ultracargo reached R$ 79 million, allocated
primarily to the acquisition of the assets of Puma, which owned a terminal in
the port of Suape, and to the 12 thousand m3
expansion of the Aratu terminal, completed in 3Q09, and to the 21 thousand
m3
expansion of the Santos terminal, expected to start up in 1Q10.
The 2010
investment plan, excluding acquisitions, totals R$ 820 million and is aimed at
the growth through scale, technological differentiation and productivity gains,
as well as the modernization of the existing operations. The increase in
investments compared with 2009 reflects the more dynamic economic environment
experienced during the last months of the year, with consequent more attractive
opportunities for all our businesses. At Ultragaz, investments will be allocated
primarily to the expansion of UltraSystem (small bulk delivery), a segment whose
growth is linked to the performance of the economy, to the strengthening of
activities in the North and Northeast of Brazil and to the acquisition of LPG
bottles and tanks. At Ipiranga, investments will be directed to the expansion
and renewal of its distribution network and to operational improvements,
including expansion to the Mid-West, Northeast and North regions, which started
with the acquisition of Texaco. Of the total investments budgeted by Ipiranga,
R$ 182 million are related to additions to property, plant and equipment and R$
133 million are related to financing and bonuses to clients, net of repayments.
At Oxiteno, investments include R$ 185 million for the conclusion of the
expansions of the ethylene oxide and ethoxylation units at Camaçari, which will
add 90 thousand tons/year and 70 thousand tons/year, respectively, to the
production capacity. Ultracargo will allocate its investments primarily to a 50
thousand m³ expansion in its Suape, Santos and Aratu terminals.
|
ii.
|
Sources
of financing investments
|
For
further details on the sources of financing investments see “Item 10.1.d.
Sources for financing working capital and investments in non-current assets” e
“Item 10.1.e. Sources for financing working capital and investments in
non-current assets to be used to in case of deficiencies in
liquidity”
|
iii.
|
Relevant
disposals in process and forecasted
disposals
|
Not
applicable
|
b.
|
Disclosed acquisitions
of plants, equipment, patents or other assets that may materially affect
the issuer’s production
capacity
|
At
Oxiteno, investment plan for 2010 includes R$ 185 million for the conclusion of
the expansions of the ethylene oxide and ethoxylation units at Camaçari, which
will add 90 thousand tons/year and 70 thousand tons/year, respectively, to the
production capacity.
In
December 2009, Ultracargo acquired from Puma a storage terminal for liquid bulk
with a capacity of 83 thousand cubic meters located at the port of Suape, in the
state of Pernambuco. The acquired terminal is located
in an
area leased by Ultracargo and adjacent to its existing terminal in the port of
Suape, thus allowing the immediate integration of the operations. The capacity
of the acquired terminal will be added to Ultracargo’s current capacity of 540
thousand cubic meters, representing a 15% increase in the total liquid bulk
storage capacity of the company.
|
c.
|
New products and
services:
|
Oxiteno
carries on a wide range of research and development activities, principally
related to the application of specialty chemicals and improvements in production
processes. As of December 31st, 2009,
103 employees of Oxiteno were engaged in research and development and
engineering activities. Oxiteno’s research and development expenditures in 2009
were R$ 22.2 million. In 2004, Oxiteno founded its own “Science and Technology
Council” with six of the world’s major specialists in surfactants being members.
With experience in the surfactant industry or in the academic environment,
having worked in the US, Europe and Latin America, these specialists follow the
tendencies and opportunities in the sector. The council, currently composed of
five specialists, meets once a year in September in São Paulo, when deeply
analyses Oxiteno’s research and development project portfolio, as well as the
management methodology applied. Valuable recommendations allow Oxiteno to
improve its research and development activities’ efficiency, as well as
broadening the reach of it alliances with foreign institutions. In December
2005, Oxiteno signed a contract with PMD – Project Management and Development
Co., or PMD, a private Saudi-Arabian company with their head-office in the
industrial city of Al Jubail, for the license of technologies for the production
of ethanolamines and ethoxylates. The technologies licensed by Oxiteno will be
used in the petrochemical complex located in Al Jubail, currently being built by
PMD. The plants that will use the Oxiteno technologies will have a production
capacity of 100,000 tons/year of ethanolamines and 40,000 tons/year of
ethoxylates.
Oxiteno’s
investments in research and development have resulted in the introduction of 58
new applications for its products during the last three years. Oxiteno will
continue to invest in research and development focused on developing new product
applications to meet clients’ needs.
In
October 2008, Oxiteno started operations at its oleochemical unit in Camaçari,
whose main output is the fatty alcohol. This plant is a pioneer unit in Latin
America for the production of fatty alcohols. Fatty alcohols are raw materials
used in the production of specialty chemicals derived from ethylene oxide,
widely used in personal care products and for various applications in domestic
cleaning products, among others. Fatty alcohols and their co-products were
mainly imported in Brazil and are already widely used in Oxiteno’s surfactant
line. Oxiteno is currently the largest consumer of fatty alcohols in Brazil, and
approximately 40% of the total volume produced by the new plant is used by us.
The processing capacity of the oleochemical unit is approximately 100 thousand
tons per year. The total investment was approximately R$ 460 million. Oxiteno’s
fatty alcohols plant will use vegetable oils as feedstock, especially palm
kernel oil.
Ipiranga
constantly develops specific initiatives for each segment in which it operates,
such as the offering of supply and technical support at large clients’
facilities. In the urban service stations segment, the wide range of non-fuel
products and services and the constant pursue of excellence have being
contributing significantly to the increase in the number of consumers and the
client-loyalty for its service stations. In addition to fueling its vehicles the
consumer can also shop at am/pm convenience stores and at Ipirangashop.com and
enjoy other services provided in many service stations of Ipiranga’s network. In
another pioneering initiative in the fuels market, Ipiranga developed in 2009
the Km de Vantagens, a program to encourage the loyalty of clients and resellers
through rewards and other benefits. Within less than one year from its
launching, the program has more than 2.4 clients. Another important initiative
in 2009 was the launching of Jet Oils Motos, the first and only oil-changing and
specialized services network to serve a fleet that grew 92% in the last 5 years
and amounts to more than 15 million motorcycles.
10.11.
|
Discussion
on other relevant factors which affected the operational
performance
|
No
additional factors which may significantly affect Ultrapar’s operational
performance, were identified.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: March
29, 2010
ULTRAPAR
HOLDINGS INC.
|
|
|
|
|
|
By:
|
/s/
André Covre
|
|
|
Name:
|
André
Covre
|
|
|
Title:
|
Chief
Financial and Investor Relations Officer
|
|
(MD&A)